Halliburton 2Q Earnings Fall 48% On Weak Demand, Lower Prices

   DOW JONES NEWSWIRES 
 

Halliburton Co.'s (HAL) second-quarter earnings fell 48% on weak demand and lower prices, but results were better than feared.

Oil-and-gas producers are slashing spending on oilfield services as commodity prices have slumped and demand wanes. Halliburton and other companies began offering contracts tied to oil-price indexes earlier this year to keep project afloat.

Chairman and Chief Executive Dave Lesar said weak global demand and commodity-market volatility continue to weigh on the oilfield-services industry. He added North America continued to see a steep drop in drilling activity as average rig count fell 39% sequentially.

"Due to the continued weakness in natural gas demand, reflected in the high injection rates for working gas storage, we believe it is unlikely that there will be a meaningful recovery in natural gas prices and, consequently, drilling activity for the remainder of the year," Lesar said.

The company reported a profit of $262 million, or 29 cents a share, down from $504 million, or 55 cents a share, a year earlier. The latest period included a 1-cent job-cut charge while the prior year included a 13-cent loss from discontinued operations.

Revenue decreased 22% to $3.49 billion, weakened by a 37% decline in North America and a 17% drop in the Middle East and Asia.

Analysts polled by Thomson Reuters most recently were looking for earnings of 27 cents on revenue of $3.43 billion.

At Halliburton's completion-and-production arm, earnings declined 33% on a drop in North America primarily because of the decline in U.S. land activity, volume reductions and price declines in the U.S. At its drilling-and-evaluation division, profit fell 6.6% on lower prices and volumes in North America.

Shares closed at $21.38 on Friday and didn't trade premarket. The stock is down roughly 55% in the past year.

-By Tess Stynes and Kerry Grace Benn, Dow Jones Newswires; 212-416-2481; [e-mail]