By Chelsey Dulaney
Halliburton Co. logged better-than-expected results in its first
quarter. But, company booked $823 million in charges for
write-downs and job cuts as the oil-field services company seeks to
moderate the impact of the recent tumble in oil prices.
Still, Halliburton said that its customers have lowered activity
and are seeking price concessions.
"Industry prospects will continue to be challenged in the coming
quarters, and visibility to the ultimate depth and length of this
cycle remains uncertain," said Chief Executive Dave Lesar.
The results come as the company 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.
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 allowing cost savings.
Halliburton, the second largest oil-field-services company and a
bellwether for the industry, unveiled plans in February to cut up
to 8% of its global workforce, amounting to about 6,400 layoffs. In
December, the company said it would cut 1,000 jobs outside the
U.S.
The latest quarter's results included $823 million, or 97 cents
a share, in write-downs, write-offs and severance charges, among
other items.
Overall, for the quarter ended March 31, Halliburton reported a
loss of $643 million, or 76 cents a share, compared with a
year-earlier profit of $622 million, or 73 cents a share.
Excluding special charges, earnings from continuing operations
were 49 cents a share.
Revenue fell 4% to $7.1 billion.
Analysts polled by Thomson Reuters expected earnings of 37 cents
a share and revenue of $6.96 billion.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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