Halliburton Feels Impact from Lower Oil Prices -- Update

By Chelsey Dulaney 

Halliburton Co. reported a loss in the first quarter as the oil-field services provider continues to feel the impact from lower oil prices.

The Houston-based company, which is in the process of acquiring smaller rival Baker Hughes Inc., said Monday that its customers have lowered drilling activity and are seeking price concessions.

"Industry prospects will continue to be challenged in the coming quarters, and visibility to the ultimate depth and length of this cycle remains uncertain," Chief Executive Dave Lesar said. Halliburton booked $823 million in charges for write-downs and job cuts in the first quarter.

Halliburton shares, down 23% over the past year, rose 11 cents to $47 as the company's revenue and earnings before items surpassed analyst expectations.

The results come as the company moves forward with plans to acquire Baker Hughes. The deal, struck in November and valued at almost $35 billion at the time, underscored the new realities for energy companies in a world suddenly awash with oil. As a result, oil-field services companies, which are hired to drill and pump wells, are facing less demand for their services and pressure to cut prices.

Industry experts have predicted that firms like Halliburton and Baker Hughes will have to shrink further as clients demand price cuts. The merger will give Halliburton and Baker Hughes better depth and breadth while allowing cost savings.

Halliburton, the second largest oil-field-services company, unveiled plans in February to cut up to 8% of its global workforce, amounting to about 6,400 layoffs. In December, the company said it would cut 1,000 jobs outside the U.S.

Overall, for the quarter ended March 31, Halliburton reported a loss of $643 million, or 76 cents a share, compared with a year-earlier profit of $622 million, or 73 cents a share.

The latest quarter's results included $823 million, or 97 cents a share, in write-downs, write-offs and severance charges, among other items. Excluding those charges and other items, earnings from continuing operations were 49 cents a share.

Revenue fell 4% to $7.1 billion.

Analysts polled by Thomson Reuters expected earnings of 37 cents a share and revenue of $6.96 billion.

Write to Chelsey Dulaney at [e-mail]

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