Halliburton Swings to Loss but Signals Upturn

Halliburton Co. swung to a loss in its latest quarter as it booked hefty charges related to its failed tie-up with Baker Hughes Inc. and revenue from its North American business continued to drag amid energy-market volatility.

Still, results came in much better than anticipated, and the second largest oil-field-services company behind Schlumberger Ltd. and a bellwether for the industry emphasized a turnaround is on the horizon.

In May, Halliburton and Baker Hughes called off their merger, which was once valued at nearly $35 billion, after the companies had faced intense regulatory pressure on several continents. They had struck the deal in 2014, but it had appeared especially troubled since April, when the Justice Department filed a lawsuit to block it. The company booked $3.52 billion of costs related to terminating the Baker Hughes deal, as well as $423 million of other impairments and charges during the quarter.

Meanwhile, Halliburton said revenue in its North American operations—the largest contributor to its top line—tumbled 43% amid reduced activity throughout the U.S. land sector, particularly pressure pumping services and drilling activity.

But Chief Executive Dave Lesar said the U.S. rig count bottomed out during the quarter, pointing out it has improved by 26 over the past several weeks, reflecting operator confidence in stabilizing commodity prices.

"We believe the North America market has turned. We expect to see a modest uptick in rig count during the second half of the year. With our growth in market share during the downturn, we believe we are best-positioned to benefit from any recovery, including a modest one," he said, adding the company stands to gain market share internationally.

In all for the period ended June 30, Halliburton reported a loss of $3.21 billion, or $3.73 a share, compared with a year-earlier profit of $54 million, or 6 cents a share. Excluding special items, the company posted an adjusted loss from continuing operations of 14 cents a share. Total revenue slid 35% to $3.84 billion.

Analysts polled by Thomson Reuters had projected an adjusted loss of 19 cents a share on $3.75 billion in revenue.

Shares, inactive premarket, have risen 11% over the past three months and 32% this year.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

July 20, 2016 08:05 ET (12:05 GMT)

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