Halliburton Swings to Loss but Signals Upturn
July 20 2016 - 8:03AM
Dow Jones News
By Anne Steele
Halliburton Co. swung to a loss in its latest quarter as it
booked hefty charges related to its failed tie-up with Baker Hughes
Inc. and revenue from its North American business continued to drag
amid energy-market volatility.
Still, results came in much better than anticipated, and the
second largest oil-field-services company behind Schlumberger Ltd.
and a bellwether for the industry emphasized a turnaround is on the
horizon.
In May, Halliburton and Baker Hughes called off their merger,
which was once valued at nearly $35 billion, after the companies
had faced intense regulatory pressure on several continents. They
had struck the deal in 2014, but it had appeared especially
troubled since April, when the Justice Department filed a lawsuit
to block it. The company booked $3.52 billion of costs related to
terminating the Baker Hughes deal, as well as $423 million of other
impairments and charges during the quarter.
Meanwhile, Halliburton said revenue in its North American
operations -- the largest contributor to its top line -- tumbled
43% amid reduced activity throughout the U.S. land sector,
particularly pressure pumping services and drilling activity.
But Chief Executive Dave Lesar said the U.S. rig count bottomed
out during the quarter, pointing out it has improved by 26 over the
past several weeks, reflecting operator confidence in stabilizing
commodity prices.
"We believe the North America market has turned. We expect to
see a modest uptick in rig count during the second half of the
year. With our growth in market share during the downturn, we
believe we are best-positioned to benefit from any recovery,
including a modest one," he said, adding the company stands to gain
market share internationally.
In all for the period ended June 30, Halliburton reported a loss
of $3.21 billion, or $3.73 a share, compared with a year-earlier
profit of $54 million, or 6 cents a share. Excluding special items,
the company posted an adjusted loss from continuing operations of
14 cents a share. Total revenue slid 35% to $3.84 billion.
Analysts polled by Thomson Reuters had projected an adjusted
loss of 19 cents a share on $3.75 billion in revenue.
Shares, inactive premarket, have risen 11% over the past three
months and 32% this year.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
July 20, 2016 07:48 ET (11:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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