By Chelsey Dulaney 

Halliburton Co. posted higher earnings and revenue in its December quarter but warned that 2015 will be challenging, as the oil-field services moves forward with plans to acquire smaller rival Baker Hughes Inc.

The deal with Baker Hughes, struck in November and valued at almost $35 billion at the time, underscored the new realities for energy companies in a world suddenly awash with oil. As a result, oil-field services companies, which are hired to drill and pump wells, are facing less demand for their services and pressure to cut prices.

Chief Executive Dave Lesar said Tuesday that Halliburton benefited from cost cuts in the latest quarter, but warned that the industry will continue to face pressure this year. Halliburton said it would likely take another restructuring charge in the first quarter for "severance and other actions."

Shares of Halliburton fell 1.9% to $38.38.

Halliburton, the second largest oil-field-services company and a bellwether for the industry, last month said it laid off 1,000 workers outside the U.S. as it seeks to reign in costs to help offset pricing pressures. In recent weeks the Houston-based company said it would downsize closer to home.

Industry experts have predicted that firms like Halliburton and Baker Hughes will have to shrink further as clients demand price cuts. The merger will give Halliburton and Baker Hughes better depth and breadth while saving billions a year in costs.

For the quarter ended Dec. 31, Halliburton reported a profit of $901 million, or $1.06 a share, compared with a year-earlier profit of $793 million, or 93 cents a share. Halliburton said it took a $129 million restructuring charge in the quarter to temper the weak outlook. Excluding that and a $19 million charge related to the Baker Hughes acquisition, earnings were $1.19 a share.

Revenue grew 14.8% to $8.77 billion.

Analysts polled by Thomson Reuters expected earnings of $1.10 a share and revenue of $8.78 billion.

The company's completion and production segment reported a 20.5% revenue surge to $5.47 billion, while its drilling and evaluation revenue climbed 6.5% to $3.3 billion.

Earlier Tuesday, Baker Hughes also reported results in its December quarter that topped Wall Street expectations as it benefited from stronger-than-projected demand and cost cuts.

Alison Sider contributed to this report.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

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