By Chelsey Dulaney
Halliburton Co. has cut 9,000 jobs, or 10% of its workforce, in
the past two quarters and plans to lay off more employees in the
coming months, the company said.
Jeff Miller, president of the Houston-based oil-field service
firm, announced the steep cuts Monday while reporting first-quarter
financial results to investors. Halliburton helps energy companies
drill oil wells around the world, but is feeling the impact of
lower crude prices, particularly in the U.S., where shale producers
are paring their operations.
The company booked $823 million in charges related to
write-downs and job cuts in the quarter as its customers slowed
their quest to find new fuel.
Halliburton is in the process of acquiring rival
oil-field-service company Baker Hughes Inc. Customers of both firms
have cut their planned spending on drilling and fracking this year
as crude-oil prices languish in the $50-a-barrel range. Clients
also have asked for significant price reductions for the types of
services that Halliburton and its peers provide.
"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 Dave Lesar, chief executive of
Halliburton.
Schlumberger Ltd., the largest oil-field-service company in the
world, has cut the most workers from its ranks so far during this
downturn. Last week the company said it would lay off an additional
11,000 employees, bringing its total to 20,000, or 15% of its
workforce.
Halliburton shares, down 23% over the past year, rose 3.3% to
$48.47 in mid-day trade as the company beat analysts' expectations.
Excluding special charges, first-quarter profit was 49 cents a
share. Revenue fell 4% to $7.1 billion. Analysts polled by Thomson
Reuters were anticipating earnings of 37 cents a share and revenue
of $6.96 billion.
Overall, the company had a loss of $643 million, or 76 cents a
share, during the first three months of the year, compared with the
prior-year profit for the quarter of $622 million, or 73 cents a
share.
The results come as Halliburton presses ahead with plans to
acquire Baker Hughes. The $35 billion deal, announced in November,
underscores the new realities for energy companies in a world awash
in oil.
Industry experts have predicted a combined Halliburton-Baker
Hughes and other oil-field-service companies will be forced to
shrink further as demand for their services stays lackluster,
clients request additional price cuts and competition in the
crowded oil-field-service field gets even more fierce.
Halliburton executives said Monday that a merger will give it
more expertise and better access to the best oil-drilling
technology while producing cost savings that it can pass on to
customers.
Even though drilling activity across North America has slumped
as the price of oil plunged from over $100 a barrel last summer to
around $55 a day today, Halliburton predicts that drilling in the
U.S. could come back fast just as soon as oil prices begin to
rebound.
"One way to look at it is that the U.S. unconventional business
is now the lowest-cost, fastest-to-market incremental barrel of oil
available in the world today," Mr. Miller said.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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