Oilfield services behemoth Halliburton Company (HAL - Free Report) reported lower-than-expected second-quarter profit after robust North American land drilling activity on the back of oil pricing strength were more than offset by reduced pressure pumping services in the Middle East, decreases in completion tool sales in Europe/Africa/CIS and decline in Gulf of Mexico drilling activity.

The world's second-largest oilfield services company after Schlumberger (SLB - Free Report) saw its income from continuing operations come in at 58 cents per share, just shy of the Zacks Consensus Estimate of 59 cents. Meanwhile, revenues of $6,147 million beat the Zacks Consensus Estimate of $6,110 million.

Importantly, Halliburton joined fellow oil services biggies Schlumberger and Baker Hughes, a GE Company (BHGE - Free Report) in affirming increased activity in the U.S. shale, driven by strong oil and gas production in response to an improving crude environment.

Halliburton Company Price, Consensus and EPS Surprise

Halliburton Company Price, Consensus and EPS Surprise | Halliburton Company Quote

Segmental Performance

Operating income from the Completion and Production segment was $669 million, significantly higher than the year-ago level of $397 million. The division’s performance was helped by continued growth in the North American land drilling business. Further, Halliburton experienced a bump in the Europe/Africa/CIS pressure pumping services, while completion tool sales in the Middle East were higher as well.

However, the segment operating income could not match our consensus estimate of $688 million. The shortfall could be attributed to lower completion tool sales in Europe/Africa/CIS and decreases in pressure pumping services in the Middle East.

Meanwhile, Drilling and Evaluation unit profit improved from $125 million in the second quarter of 2017 to $191 million this year. The outperformance was on account of higher drilling activity in the domestic land sector, improved drilling services and project management activity in the Middle East and India, as well as higher software sales in Mexico.

But the segment income was below the Zacks Consensus Estimate of $199 million. Results were hampered by lower drilling fluid activity in the Gulf of Mexico.

Balance Sheet

Halliburton’s capital expenditure in the second quarter was $565 million. As of Jun 30, 2018, the company had approximately $2,058 million in cash/cash equivalents and $10,427 million in long-term debt, representing a debt-to-capitalization ratio of 54.1%.

Zacks Rank & Stock Picks

Halliburton currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at a better-ranked oilfield service player like Mammoth Energy Services, Inc. (TUSK - Free Report) . Mammoth Energy is a Zacks Rank #1 (Strong Buy) stock.