Halliburton Trims Workforce As Drilling in U.S. Weakens -- WSJ

Date : 07/23/2019 @ 8:02AM
Source : Dow Jones News
Stock : Halliburton Co (HAL)
Quote : 18.95  -0.38 (-1.97%) @ 3:58PM

Halliburton Trims Workforce As Drilling in U.S. Weakens -- WSJ

Halliburton (NYSE:HAL)
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By Micah Maidenberg 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 23, 2019).

Halliburton Co. said it cut jobs in North America in the latest quarter and warned that energy producers in the region are paring their spending.

The oil-field services company said its second-quarter revenue in the U.S. and Canada fell 13% from a year earlier to $3.33 billion.

Halliburton expects activity to weaken slightly in the current 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.

The Houston-based company cut its workforce in North America by 8%, according to a spokeswoman, who declined to comment further. It also idled equipment, executives said, helping to boost profit margins in the region.

Shares rose 9.2% to close at $23.74 after Halliburton's adjusted profit beat expectations for the second quarter.

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 week, 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.

Weatherford International PLC, a competitor of Halliburton and Schlumberger, filed for bankruptcy protection in June, one of the biggest oil-and-gas bankruptcies in years.

As oil-and-gas companies' spending on exploration, development and production has decreased, so has demand for Weatherford's services and products, the company said in a regulatory filing last month.

Drilling activity may have begun to slow in Texas, New Mexico and Louisiana in the second quarter of 2019, according to a survey in June of oil-and-gas companies by the Dallas Federal Reserve. The Fed's business-activity index, a broad measure of the industry's health, contracted slightly last quarter as oil producers cut their budgets.

Not every producer active in North America is certain 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 planned to ramp up oil-and-gas production in the Permian Basin in Texas and New Mexico.

Overall, Halliburton reported second-quarter revenue of $5.93 billion, down about 4% from a year earlier. Analysts had predicted revenue of $5.97 billion. Revenue from other international markets rose 13% to $2.6 billion.

Second-quarter profit fell to $75 million, or 9 cents a share, from $511 million, or 58 cents a share, a year earlier. Excluding impairments and after other adjustments, earnings came to 35 cents a share, 5 cents more than expectations of analysts polled by FactSet.

--Christopher M. Matthews contributed to this article.

Write to Micah Maidenberg at micah.maidenberg@wsj.com


(END) Dow Jones Newswires

July 23, 2019 02:47 ET (06:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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