Name: Halliburton Co. (NYSE:HAL) | Common-Size Income Statement
Creator: Stock Analysis on Net

Common-Size Income Statement

Halliburton Co., common-size consolidated income statement

12 months ended:	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
Services	76.87%	74.72%	70.12%	73.97%	76.18%
Product sales	23.13%	25.28%	29.88%	26.03%	23.82%
Revenue	100.00%	100.00%	100.00%	100.00%	100.00%
Cost of services	-69.14%	-68.93%	-70.83%	-67.28%	-63.76%
Cost of sales	-18.41%	-20.09%	-23.73%	-22.06%	-19.99%
Cost of services and product sales	-87.56%	-89.02%	-94.56%	-89.34%	-83.75%
Gross profit	12.44%	10.98%	5.44%	10.66%	16.25%
Merger-related costs and termination fee	0.00%	0.00%	-25.54%	-1.30%	-0.05%
Impairments and other charges	-1.10%	-3.14%	-21.13%	-9.21%	-0.39%
General and administrative	-1.06%	-1.24%	-1.44%	-0.85%	-0.89%
Activity related to the Macondo well incident	0.00%	0.00%	0.00%	0.00%	0.59%
Operating income (loss)	10.28%	6.61%	-42.66%	-0.70%	15.51%
Interest expense	-2.49%	-3.42%	-4.39%	-1.96%	-1.20%
Interest income	0.18%	0.54%	0.37%	0.07%	0.04%
Interest expense, net of interest income	-2.31%	-2.88%	-4.02%	-1.89%	-1.17%
Other, net	-0.41%	-0.42%	-1.31%	-1.37%	-0.01%
Income (loss) from continuing operations before income taxes	7.56%	3.31%	-48.00%	-3.96%	14.34%
Income tax (provision) benefit	-0.65%	-5.48%	11.70%	1.16%	-3.88%
Income (loss) from continuing operations	6.91%	-2.18%	-36.30%	-2.80%	10.46%
Income (loss) from discontinued operations, net	0.00%	-0.09%	-0.01%	-0.02%	0.19%
Net income (loss)	6.91%	-2.27%	-36.31%	-2.82%	10.65%
Net (income) loss attributable to noncontrolling interest	0.00%	0.02%	0.04%	-0.02%	0.00%
Net income (loss) attributable to company	6.90%	-2.25%	-36.27%	-2.84%	10.65%

Based on: 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31).

The financial performance from 2014 to 2018 is characterized by a period of severe volatility, reaching a nadir in 2016 before initiating a gradual recovery in profitability. The period begins with strong margins that deteriorate sharply over three years, primarily driven by escalating costs and significant non-recurring charges, followed by a stabilization of operating margins toward the end of the period.

Revenue Composition: A fluctuating distribution between services and product sales is observed. Services consistently represent the majority of revenue, though the share declined from 76.18% in 2014 to a low of 70.12% in 2016. Conversely, product sales peaked in 2016 at 29.88% before returning to 23.13% by 2018, indicating a temporary shift in the revenue mix during the mid-period downturn.
Gross Profitability and Cost Structure: Gross profit margins experienced a significant contraction between 2014 and 2016, falling from 16.25% to 5.44%. This decline was driven by an increase in the total cost of services and product sales, which rose from 83.75% of revenue in 2014 to a peak of 94.56% in 2016. A recovery trend emerged in 2017 and 2018, with gross profit improving to 10.98% and 12.44%, respectively, as the total cost of sales retreated to 87.56%.
Operating Expenses and Extraordinary Items: Operating income was heavily impacted by non-recurring charges, most notably in 2016. Merger-related costs and termination fees represented a substantial 25.54% of revenue in 2016, while impairments and other charges peaked at 21.13% in the same year. These extraordinary items were the primary drivers of the operating loss of 42.66% in 2016. General and administrative expenses remained relatively stable and low, fluctuating between 0.85% and 1.44% of revenue throughout the period.
Net Income and Financial Position: The net income attributable to the company followed a U-shaped trajectory, starting at 10.65% in 2014, plummeting to -36.27% in 2016, and recovering to 6.90% by 2018. Net interest expense peaked in 2016 at 4.02% of revenue, reflecting increased financial pressure during the period of peak operational losses. Tax benefits provided a partial offset during the loss-making years, particularly in 2016 when the income tax benefit reached 11.70% of revenue.

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