Halliburton Swings to Profit

Halliburton Co. swung to an unexpected profit in its first quarter relieved of hefty charges related to its failed tie-up with Baker Hughes Inc., and the firm signaled improvement in its North American business.

Dave Lesar, chief executive of the oil-field-services company, said he is pleased with the results "given the devastation our industry has faced over the last two years."

North America results—which have dragged lately amid energy-market volatility—improved on rig count growth and "relentlessly managing costs," Mr. Lesar said.

He said the business—the largest contributor to its top line—grew 9% sequentially, and operating results improved by $58 million, representing margin improvement.

"This is a step in the right direction as we work to regain profitability in North America," he said.

In all, revenue in North American operations tumbled 33% from a year ago.

Mr. Lesar, who last quarter emphasized a turnaround on the horizon, said the company expects an increased commodity price to stimulate rig count growth.

"We remain cautious around fourth quarter customer activity due to holiday and seasonal weather-related downtimes," he said. "However, it does not change our view that things are getting better for us and our customers."

Over all for the September quarter, Halliburton posted a profit of $6 million, or a penny a share, compared with a year-earlier loss of $54 million, or 6 cents a share. Total revenue plunged 31% to $3.83 billion. Analysts polled by Thomson Reuters had projected a loss of 6 cents a share on $3.9 billion in revenue.

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. In the year ago period, the company booked $82 million of costs related to terminating the Baker Hughes deal, as well as $381 million of other impairments and charges during the quarter.

Shares in the company, which have risen 38% so far this year, inched 0.9% higher premarket to $47.50.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

October 19, 2016 08:15 ET (12:15 GMT)

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