Jeff Miller
Chairman, President and Chief Executive Officer at Halliburton
Thank you, David, and good morning, everyone. Halliburton delivered solid second quarter results that demonstrated the strength of our international business and the differentiation of our North America service offerings.
Here are the quarter highlights. We delivered total company revenue of $5.8 billion and operating margin of 18%. International revenue was $3.4 billion and grew 8% year over year, led by Latin America, which delivered a 10% increase. North America revenue was $2.5 billion, an 8% decrease year over year compared to a 12% decline in rig count over the same period. Our Drilling and Evaluation division and our Completion and Production division both demonstrated margin improvement year over year. Finally, during the second quarter, we generated $1.1 billion of cash flow from operations and about $800 million of free cash flow and repurchased $250 million of our common stock.
I'll begin our discussion with the international markets, where Halliburton's strategy of profitable growth delivered another solid quarter. International revenue grew 8% year over year, with growth demonstrated by each region. This marks the 12th consecutive quarter of year-on-year growth in our international business. As I look ahead for the remainder of this year, my outlook today is consistent with our expectations at the start of the year. I expect steady growth for Halliburton throughout the remainder of 2024. In our international markets, we see strong demand for Halliburton services, high activity levels and equipment tightness across all major basins. We expect our international business to deliver about 10% revenue growth for the full year.
I am pleased with the profitable growth we are seeing across our product lines and, today, I would like to highlight three specific ones in more detail. The first is our Landmark software business. I recently attended our Landmark Forum, LIFE2024, in Athens, Greece. It is an annual event where we share our latest software innovations and our customers share their successes and future opportunities.
While in Athens, I had the opportunity to meet with dozens of customers and they told me how excited they were about our latest offerings like Unified Ensemble Modeling, Scalable Earth Model and our latest developments in AI and machine learning. These tools change the way customers work by driving efficiencies from asset-level planning through production. The conference included customer presentations that showcase their business transformation and their use of Halliburton Landmark's tools. Our customers tell us we create unique value with our iEnergy cloud platform, which seamlessly integrates into their workflows. I am confident that Landmark's decision Space 365 will expand and add to our customers' productivity and innovation journey.
Next, Halliburton's artificial lift product line is growing in the international markets at double the rate of our overall international business. It embodies our successful M&A strategy of bolt-on acquisitions that bring leading technology into our portfolio. We organically grow new technologies through our global footprint and through collaboration with our customers to engineer solutions that maximize their assets value. As one example, this quarter, we launched our GeoESP line, which is engineered for the harsh geothermal environment. The GeoESP line solves for extreme thermal cycling, scale development, abrasion and corrosion. While geothermal ESP technology has applications across the globe, Halliburton sees substantial growth opportunities in Europe, where customers require advanced technology to bring geothermal to scale.
Finally, Halliburton's drilling services are key to our success in the international markets. We had another strong quarter in unconventional drilling with our iCruise X rotary steerable system and our LOGIX autonomous drilling platform. We deployed advancements that improve drilling speed and reliability and set several interval records during the quarter. We invest in differentiated drilling technology and we expect our strong performance and reliable execution to drive above market growth. For example, in the Middle East, our drilling services revenue grew about 30% year over year. I am pleased with our international business and look forward to deepening our strategy and delivering additional profitable growth.
Turning to North America. Our second quarter revenue declined 3% compared to the first quarter. Halliburton's first half 2024 results were largely as we expected. However, as we have seen, rig counts and overall service activity declined through the quarter. As I look to the second half of 2024, I now expect full year North America revenues to decline 6% to 8% versus last year, driven by lower activity. I expect that the second half of 2024 will be near the low point of activity levels this cycle. And while it's too early to give specific guidance for 2025 in North America, I expect activity to be directionally higher than the second half of 2024.
Here's how I think about this. First, I expect an increase in activity after E&P companies complete their acquisitions and establish new development plans. Second, some of the merged assets will be divested to smaller operators who will put them to work. Finally, I expect some recovery in natural gas activity. Six years ago, when we set our strategy to maximize value in North America, I understood it may take a market like we see today where North America activity declined by over 200 rigs in the last 18 months to demonstrate the margin resilience and earnings power of our strategy. I am pleased that Halliburton delivered strong C&P margins through this period and I am confident that our strategy will deliver strong results in the future.
We are committed to our strategy to maximize value in North America because it delivers shareholder value and it is the right strategy for this market. For Halliburton, we focus on returns. We allocate capital to the markets and products that drive superior returns and margins. We prioritize returns over market share, and to that end, we retired a few fleets this quarter. We developed differentiated technologies that solve for the unique requirements of the North America market. And lastly, we improve efficiencies for our customers through those technologies, service, quality and execution. I expect this strategy will deliver leading performance for our customers and a structurally more resilient North America business for Halliburton. A key part of how we do this is our strategic investment in technology.
One technology I'm excited about is the latest addition to Octiv, a key component of the ZEUS platform. Today, Octiv is a cornerstone of how we deliver large multi-well pads with unmatched precision and consistency. As our customers execute completions with ever-increasing size and intensity, automation, as delivered by Octiv, provides better control and more effective delivery for simul-frac and trimul-frac operations.
During the second quarter, we completed field trials of the latest level of Octiv automation called AutoFrac. With the single click of a button, AutoFrac executes the entire frac job from ramp up at the start to ramp down at the end, making autonomous fracturing a reality. This new level of automation gives customers control to execute the frac design exactly how they want it without human intervention. Following our commercial trials, AutoFrac is ready to scale, and I'm excited about what this technology means for our customers and for Halliburton.
Lastly, we see rapid adoption in North America of our iCruise rotary steerable system. We consistently reduce drilling times for our customers and create significant value. In the Permian basin, the number of rigs running the system has increased by almost 45% since the start of this year. We are on pace to triple our footage drilled in North America this year and I'm excited about the market adoption of iCruise. North America is the largest oil field services market in the world. We are crystal clear on how we maximize value in North America. We have demonstrated that this strategy works, and that's why I am confident that we will continue to deliver strong returns through this cycle.
To step back, Halliburton's returns and cash flows are strong and I am pleased with our performance this quarter. I'm just back from a few weeks in Europe/Africa. What I saw is a microcosm of Halliburton around the world. The quality of our people, the clarity of our strategy, our leading technologies, the depth of our pipeline of opportunities, and the competitiveness of our business segments, all give me incredible confidence in Halliburton's future.
Now, I'll turn the call over to Eric to provide a few more details on our financial results. Eric?
