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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