Halliburton Delays Release of Full First-Quarter Financial Data
April 22 2016 - 9:03PM
Dow Jones News
By Ezequiel Minaya
Halliburton Co. is delaying the release of its full
first-quarter financial results until next month, amid a looming
April 30 deadline for its merger with Baker Hughes Inc. that has
faced stiff regulatory opposition.
Halliburton said Friday that it would release its latest data
May 3. But the oil-field-services company, nonetheless, disclosed
that it cut some 6,000 jobs in the quarter ended March 31, more
than the 5,000 jobs originally estimated for elimination in
February.
The company's head count has fallen by roughly a third or about
28,600 workers since the oil downturn began in 2014. On its
website, Halliburton says it has more than 55,000 employees.
The prolonged collapse in oil prices has resulted in a decrease
in investment, leaving the oil-field-services industry with
battered top lines.
The company also reported first-quarter revenue of $4.2 billion,
down 40% from a year earlier but more than the average estimate of
$4.16 billion by analysts surveyed by Thomson Reuters.
Halliburton Chief Executive Dave Lesar said that production
declines were expected through 2016, with clients slow to ramp up
even if there is a turnaround in the market as they first try to
repair their balance sheets.
"What we are experiencing today is far beyond headwinds; it is
unsustainable," he said, addressing market conditions in North
America. "My definition of an unsustainable market is one where all
service companies are losing money in North America, which is where
we are now."
He added that last year's 40% decline in industry spending in
North America will be followed by an estimated 50% fall this
year.
Halliburton and Baker Hughes set the April 30 deadline for
obtaining all regulatory approvals for the merger, after which
either company could terminate the deal, though they could also
choose to stay the course.
Halliburton would have to pay a steep $3.5 billion breakup fee
if the deal falls apart. But some analysts have said that Baker
Hughes might struggle to regain its footing as an independent
company.
The $35 billion deal was struck in November 2014, during better
times for the energy sector and would combine the world's second-
and third-largest oil-field services firms after Schlumberger
Ltd.
Since the deal was struck, the oil-field services industry has
faced severe setbacks, as persistently low oil prices have slashed
demand for the business of drilling wells and pumping oil and
natural gas.
The proposed merger also has faced antitrust resistance around
the globe. Earlier this month, the Justice Department filed an
antitrust suit challenging the deal, alleging the merger would
threaten higher prices and reduce innovation in the sector.
The lawsuit, filed in a Delaware federal court, asserted that
the transaction would eliminate important head-to-head competition
in markets for 23 products and services used for U.S. oil
exploration and production, from drill bits to offshore cementing
services.
Halliburton and Baker Hughes have been trying to ease those
concerns by offering to sell off assets worth billions of
dollars.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
April 22, 2016 20:48 ET (00:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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