Halliburton Company (NYSE:HAL) Q3 2019 Earnings Conference Call - Final Transcript

Oct 21, 2019 • 09:00 am ET

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Halliburton Company (NYSE:HAL) Q3 2019 Earnings Conference Call - Final Transcript

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Q & A
Executive
Jeff Miller

don't have the visibility on 2020 at this point because it's still early. That said, I believe, Halliburton outgrows the increase in drilling and completion spend whatever that is internationally. And as I described, I mean, I think we've got a good set of contracts set up for 2020 and technically, we're very well positioned for 2020. And so, without trying to put a number on that today, we all feel Halliburton will be very competitive in that space anyway, yeah.

Analyst
Angeline Sedita

Okay. Okay. So maybe on your remarks on the attrition, it'd be great to hear any additional color on attrition and retirements for Halliburton and what you're hearing for the industry as a whole for even this year and next year and how much supply you think could be pulled out of the market?

Executive
Jeff Miller

Yeah, I mean, as I've always said, it's hard to see attrition until there's a call on the equipment, but it's pretty clear there is less equipment in the market today than there was at the beginning of the year, and that amount varies in terms of how people call it. We think it's 15% to 20% easily in the marketplace. But then we watch equipment adds of which there really aren't any. And we know how hard equipment is working. And so, I really believe we will continue to see that as we go into even 2020 in terms of the attrition happening -- and on our view of the market is, we want to be super careful with our equipment, we want to work it for returns, and when we don't see those returns, we want to set it to the side.

Analyst
Angeline Sedita

Great. Thanks. I'll turn it over.

Executive
Jeff Miller

Thanks, Angie.

Operator
Operator

Our next question comes from Sean Meakim with JP Morgan. Your line is open.

Analyst
Sean Meakim

Thank you. Good morning.

Executive
Jeff Miller

Good morning.

Executive
Lance Loeffler

Hey, good morning, Sean.

Analyst
Sean Meakim

So on free cash flow, I was hoping we could get a little bit more granular on the quarter and the guide. So collections improved, I think as we expected, but payables also fell a good amount. Inventory is still growing. Capex is unchanged for the year. It sounds like earnings power is going to be challenged in the fourth quarter. Just -- so the $900 million of free cash that you're effectively guiding for next -- for this quarter is dependent upon working capital to a large degree. Could you maybe just walk us through this -- those pieces?

Executive
Lance Loeffler

Yeah, Sean. Let me -- let me take a stab at that. So look, we do -- we did make considerable improvements in 3Q. I think that momentum clearly has to continue into 4Q. And it's really done, as you talk about the working capital movements, we continue to believe that we're going to progress on the way that we're collecting our receivables, expect inventory will draw down as we deliver on our completion tools orders for the fourth quarter. And my belief is that working capital on a