Halliburton profit falls as crude crash slows oilfield work

DAVID WETHE

HOUSTON (Bloomberg) -- Halliburton Co.’s profit tumbled in the last quarter after a yearlong crude-market crash forced customers to slam the brakes on oilfield work.

The world’s largest fracing-services provider said second-quarter net income fell to $54 million, or 6 cents a share, from $774 million, or 91 cents, a year earlier, the Houston-based company said in a statement Monday. Excluding certain items, the per-share result was 44 cents, more than the 29-cent average of 34 analysts’ estimates compiled by Bloomberg. Sales fell 26% to $5.91 billion.

“Underlying activity for the whole industry in the U.S. fell by more than we all thought a handful of months ago,” Jeff Tillery, an analyst at Tudor Pickering Holt & Co. in Houston who rates the shares a buy and owns none, said in an interview before the results were released. “Oil price is going to be the barometer of what the future looks like.”

Halliburton, the second-largest oilfield services provider, is looking to sell assets to win regulatory approval for its acquisition of rival Baker Hughes Inc., valued at $34.6 billion when it was announced. Explorers have cut more than $100 billion from global spending plans for the year after oil prices fell by half from a high in June 2014.

“We recently received the initial round of bids on our previously announced divestitures, and are pleased with the prices and level of interest,” CEO Dave Lesar said in the statement.

Prices that service companies charge for hydraulic fracturing are expected to fall as much as 35% in North America this year, according to IHS Inc. Half of the 41 fracing companies operating in the U.S. are expected to close down or be sold by the end of 2015, Weatherford International Plc said in April.

Job Cuts

Halliburton and Baker Hughes are attempting to combine to attain a larger footprint and broader technology portfolio as they compete with Schlumberger Ltd. They’ll seek to close the deal no later than Dec. 1, the companies said July 10 in a statement.

Schlumberger was the first of the world’s largest oil service companies to report better-than-expected second quarter results on July 17, when it announced earnings of 88 cents a share, 9 cents better than analyst estimates. The beat was partly driven by lower costs after its 20,000 job cuts following the global crude crash.

Halliburton’s one-time charges included $258 million in asset write-offs and severance costs. The company had previously announced about 9,000 job cuts.

The shares rose 2.5% to $41 at 7:07 a.m. in New York before the start of regular trading.

Halliburton, which has 26 buy ratings from analysts, 9 holds and 2 sells, fell 1.9% in the quarter.