Common-Size Income Statement
Quarterly Data
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Halliburton Co., common-size consolidated income statement (quarterly data)
Based on: 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31).
- Revenue Composition
- The revenue mix demonstrates a consistent dominance of services, fluctuating mostly between approximately 68% and 78% over the analyzed periods. Product sales conversely ranged from about 22% to 31%, showing a slight inverse relationship with services. Notably, starting in early 2016, product sales as a percentage of revenue increased, peaking near 31% in mid-2016, before declining again toward the end of the examined timeframe.
- Cost Structure
- Costs related to services and product sales combined consistently hovered near 85% to 95% of revenue, peaking above 97% in certain quarters of 2016, thereby substantially compressing gross margins during those periods. Costs of services exhibited higher volatility than costs of product sales, with some sharp increases and declines. The cost of services notably spiked toward 72% of revenue in mid-2016. The cost of product sales increased notably in late 2015, reaching approximately 27%, and then generally stayed within the 18% to 24% range.
- Profitability and Margins
- Gross profit margins showed substantial variability, ranging from roughly 2.7% through 19.6%. Margins were relatively strong in 2014, followed by a marked deterioration in 2015 and a trough in 2016 with gross profit margins dropping as low as 2.7%. Recovery commenced in late 2016 and consolidated through 2017 and 2018, with gross profit consistently improving to above 11% by the end of 2018.
- Operating Income and Related Charges
- Operating income exhibited pronounced swings, starting moderately positive in 2014, turning negative in early 2015, and experiencing a dramatic operating loss exceeding 70% of revenue in early 2016. Subsequently, the company returned to positive operating income territory by late 2016, with a strengthening trend throughout 2017 and 2018. Large fluctuations in impairments and merger-related costs contributed significantly to negative impacts on operating income, especially severe in 2015 and early 2016. These extraordinary charges notably distorted operating results during these periods.
- Interest and Other Expenses
- Interest expense showed a rising trend from around 1.3% of revenue in 2014 to peaks exceeding 5% in 2016, implying higher borrowing costs or increased debt levels in that timeframe. Although interest income slightly increased in parallel, net interest expense substantially increased over the period. Other net items remained relatively stable, with small negative impacts below 1% of revenue typically recorded each quarter.
- Income Before Taxes and Tax Provision
- Income from continuing operations before income taxes mirrored the volatility seen in operating income, with strong positive figures in 2014, a steep reversal into deeply negative territory through 2015 and 2016, including losses exceeding 100% of revenue, reflecting substantial impairments and associated charges. Margins improved gradually from late 2016 onwards. Income tax provisions were generally negative, reducing net income during good performance periods but providing positive benefits (credits) during periods of loss, particularly striking in 2016 and 2017.
- Net Income
- Net income closely followed the pattern of income from continuing operations, showing strong positive results in 2014, followed by a swing to large negative net income in 2015 and an extreme trough in 2016 with losses reaching nearly 84% of revenue. Thereafter, net income experienced a recovery trend, oscillating around breakeven in late 2016 and early 2017, before achieving positive territory again by mid-2017 and stabilizing at around 7% to 11% of revenue during 2018. This recovery aligns with improvements in operating results and reduction in extraordinary charges.
- Overall Financial Trends
- The analyzed periods reveal a business area impacted by significant challenges starting in 2015 through 2016, characterized by high costs, impairments, merger-related costs, and resulting negative profitability. These episodes led to severe earnings declines and high volatility. From late 2016 onward, gradual improvement is observed across most profitability indicators, including gross profit, operating income, and net income, suggesting a stabilization or successful adaptation by the company. The revenue composition remained relatively stable, with services consistently contributing the majority share.