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2 Months : From Jun 2019 to Aug 2019
By Micah Maidenberg
Halliburton Co. is the latest energy-services company to warn that producers in North America are cutting back.
Halliburton's second-quarter revenue in the U.S. and Canada fell 13% from a year earlier to $3.33 billion, the company reported Monday. The company expects activity to weaken slightly in the third quarter, Chief Executive Jeff Miller said Monday.
"What we've recognized is there's a change in customer-spending patterns, " he told investors on a conference call.
Companies that provide equipment, tools and services to energy producers have been challenged as U.S. shale drillers have moved to cut spending and boost returns. Facing pressure from investors, producers have been looking to focus on generating cash flow and less on growth.
Last Friday, Schlumberger Ltd. estimated that U.S. shale drillers have reduced spending this year by 10%. The company said its North American revenue fell to $2.8 billion in the second quarter.
Not every producer active in North America is guaranteed to cut back, according to Mr. Miller, with major companies likely to continue pursuing growth projects.
Chevron Corp. and Exxon Mobil Corp. said earlier this year they plan to ramp up oil and gas production in the Permian Basin in Texas and New Mexico.
Overall, Halliburton reported revenue of $5.93 billion, down about 4% from a year earlier. Analysts had predicted revenue of $5.97 billion.
The company said its second-quarter profit fell to $75 million, or 9 cents a share, down from $511 million, or 58 cents a share, a year earlier.
Excluding impairments and after other adjustments, Halliburton reported a profit of 35 cents a share, 5 cents more than expectations of analysts polled by FactSet.
Shares rose 5% in Monday morning trading.
Halliburton boosted profit margins in North America in the second quarter by cutting costs and idling equipment, executives said.
"We will control what we can control," Mr. Miller said on the call.
Houston-based Halliburton said second-quarter revenue from other international markets rose 13% to $2.6 billion.
Write to Micah Maidenberg at firstname.lastname@example.org
(END) Dow Jones Newswires
July 22, 2019 12:01 ET (16:01 GMT)
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