Halliburton Beats Profit Target, but North American Business Slows -- Update
July 22 2019 - 12:16PM
Dow Jones News
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 micah.maidenberg@wsj.com
(END) Dow Jones Newswires
July 22, 2019 12:01 ET (16:01 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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