Halliburton cites drop in North American drilling activities

Halliburton has announced fourth-quarter income from continuing operations of $664 million, up from $435 million in 2018's third quarter.

Adjusted income from continuing operations for Q4 2018, excluding a tax benefit related to a strategic change in corporate structure, was $358 million. Halliburton’s total revenue in Q4 was $5.9 billion, a 4% drop from revenue of $6.2 billion in Q3.

Operating income was $608 million in the 4Q, a 15% drop compared to operating income of $716 million in the previous quarter.

Total revenue for full-year 2018 was $24 billion, an increase of $3.4 billion, or 16%, from 2017, the Houston-based company reported. Reported operating income for 2018 was $2.5 billion, compared to $1.4 billion for 2017.

“I am pleased with our overall financial results for the year and for the fourth quarter. Our team optimized our performance in North America as the market softened and the recovery of our international business continued,” said chairman, president and CEO Jeff Miller, in a statement.

“The trajectory of this cycle has been far from smooth. As expected, in North America, the demand for completion services decreased during the fourth quarter, leading to lower pricing for hydraulic fracturing services.

“Our international business continues to show signs of a steady recovery, with revenue increasing 7% sequentially, underscoring the versatility and global reach of our business portfolio,” he said.

Halliburton intends to “dynamically respond to the changing market environment, reduce capital spending, develop differentiating technologies and generate strong cash flow,” Miller said.

The company said North American revenue in Q4 was $3.3 billion, an 11% decrease from Q3. The decrease was primarily driven by lower activity and pricing in stimulation services, partially offset by higher fluids activity in the Gulf of Mexico, it said.

Completion and production revenue in Q4 was $3.8 billion, a drop of $338 million, or 8%, from Q3, and operating income was $96 million, a sequential drop of $117 million, or 19%, Halliburton said. That was due largely to lower activity and pricing from stimulation services in North America.

Source: Kallanish Energy