HAL Halliburton Co

By Anne Steele 

Halliburton Co. laid off another 4,000 workers at the end of last year as it lost money in the fourth quarter on its oil-field drilling and services businesses, the company said Monday.

The company, a bellwether for the energy industry, was hurt by asset write-downs and severance costs, as well as drastically lower revenue from its North American division, Halliburton executives told investors and analysts on a conference call to discuss financial results.

Halliburton, the second-largest oil-field services firm behind Schlumberger Ltd., is hunkering down for another tough year as oil prices hover around $30 a barrel and its customers continue to slash their budgets to deal with the downturn in energy markets.

Exploration and production companies that pump oil and natural gas are projected to cut their spending for the second year in a row, said Halliburton Chief Executive Dave Lesar. That trend marks the first time since the 1980s that energy producers have dialed back their operations by such a large extent.

"Once the market has visibility of the trough, the recovery will come into view," Mr. Lesar said, but adding that "2016 is simply going to be a tough slog through the mud."

Worries about slowing oil demand in China and additional crude supplies coming online from Iran have weighed heavily on the price of oil so far this year.

In North America, which is Halliburton's largest region, sales skidded 54% lower in the fourth quarter compared with the prior year's period, to $2.16 billion. Customers in the U.S. and Canada continued to curtail activity and ask for lower prices from Halliburton and other suppliers, the company said.

Even so, analysts said Halliburton's margins held up better than they had expected, particularly in North America, as the company aggressively cut its costs. Halliburton reported operating profit margins in North America of 1.9% in the fourth quarter. That is down from 19.4% in the prior year's period but an improvement over the third quarter of 2015.

"Halliburton delivered a considerably better-than-expected operational result, with margins markedly outpacing our expectations while revenues aligned with our estimate," said Bill Herbert, an analyst at Simmons & Co. International, in a note to clients.

The layoffs at the end of 2015 bring to 22,000 the number of jobs cut since the 2014 peak, representing a 25% reduction.

The oil-field services giant is in the process of acquiring Baker Hughes Inc., the third-largest energy company in this space, in a $35 billion deal. But the merger has been delayed by antitrust concerns from the U.S. Justice Department and other competition authorities around the world.

Mr. Lesar told investors and analysts Monday that the deal is still compelling even though it is taking longer than expected to complete. The company remains committed to seeing it through, and Halliburton has presented the Justice Department with a plan to sell more businesses to satisfy concerns, he added.

The company reported a loss of $28 million, or 3 cents a share, in the fourth quarter, compared with a year-earlier profit of $901 million, or $1.06 a share. Baker Hughes-related acquisition costs of $79 million, or 9 cents a share, were recorded. Excluding special items, per-share earnings from continuing operations were 31 cents, or flat from a year earlier.

Total revenue for Halliburton slumped 42% to $5.08 billion.

Analysts polled by Thomson Reuters were expecting adjusted earnings of 24 cents on revenue of $5.11 billion.

Shares of Halliburton, which are down 26% over the past 12 months, were down 2% at $29.60 shortly after 2 p.m. EST.

Last week, Schlumberger reported a fourth-quarter loss as revenue fell 39%. Schlumberger said it laid off an additional 10,000 workers, and hopes that will be the end of the personnel cuts.

Baker Hughes is set to report its financial results on Thursday.

Anne Steele contributed to this article.

Write to Alison Sider at alison.sider@wsj.com

(END) Dow Jones Newswires

January 25, 2016 14:36 ET (19:36 GMT)

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