Halliburton Q2 Results Beat View Despite Lower Drilling Activity

(RTTNews) - Oilfield services provider Halliburton Co. (HAL) on Monday reported a 93 percent plunge in profit for the second quarter from last year on one-time charges and lower revenues, reflecting lower levels of drilling activity amid the downturn in the energy market. However, both revenue and adjusted earnings for the quarter beat analysts' expectations.

The Houston, Texas-based company, which is in a $38 billion deal to acquire smaller peer Baker Hughes, Inc. (BHI), reported net income for the second quarter of $54 million or $0.06 per share, down from $774 million or $0.91 per share in the year-ago period.

In the latest quarter, Halliburton recorded company-wide charges of $0.30 per share, primarily as a result of the recent downturn in the energy market and its corresponding impact on the company's business outlook. The company also recorded Baker Hughes acquisition-related costs of $0.08 per share in the quarter.

Excluding items, adjusted income from continuing operations for the quarter was $380 million or $0.44 per share. On average, 34 analysts polled by Thomson Reuters expected the company to report earnings of $0.29 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter declined 26 percent to $5.92 billion from $8.05 billion in the same quarter last year, but beat analysts' consensus estimate of $5.78 billion.

Jeff Miller, president of Halliburton said, "Total company revenue of $5.9 billion declined 16% sequentially, outperforming a 26% drop in the worldwide rig count. Operating income declined as a result of lower activity levels for all product lines, exacerbated by pricing declines, primarily in North America."

Quarterly revenues for the completion and production segment decreased 30 percent from the year-ago period to $3.4 billion.

The company noted that revenues were impacted, primarily driven by a decline in pressure pumping activity and pricing declines for all product service lines in North America.

In addition, the company recorded lower activity levels in Middle East/Asia, reduced activity levels and pricing in Mexico, and the impact of the new exchange rate in Venezuela.

Drilling and Evaluation revenue for the quarter declined 20 percent from last year to $2.48 billion.

Dave Lesar, chairman and CEO of Halliburton said, "Our strategy remains consistent - we will manage costs through the downturn, while looking beyond the cycle to ensure that we will be positioned for growth when the industry recovers. We continue to invest in technology, build capital equipment, and prepare for our pending combination with Baker Hughes."

HAL closed Friday's trading at $39.99. In Monday's pre-market activity, the stock is adding $0.76 or 1.9 percent to $40.75.