Halliburton takes big quarterly profit hit
HOUSTON, July 20, 2015 – Halliburton saw its year-on-year net profit drop 93 percent for the second quarter of 2015. The US oilfield services giant posted a quarterly net profit of $53 million, or $0.06 per share, down from $775 million, or $0.91 per share in 2014.
The company posted revenues for the second quarter of $5.92 billion, compared to $8.05 billion for the same period in 2014. Despite the fall, revenues exceeded analysts’ expectations of $5.78 billion, spurring a 2.5-percent rise in Halliburton’s share price in Monday pre-market trading to $41.
Soft demand, particularly in the North American market, is mainly responsible for the profit plunge. Halliburton’s North American revenues declined 39 percent in the second quarter, to $2.67 billion. As the world’s largest fracking-services provider, Halliburton is exposed to the contraction of fracking activities in the region, instigated by continued low oil prices.
Oilfield services rival Weatherford International said in April 2015 that half of the 41 fracking companies operating in the US would close or be sold off by the end of 2015. At the same time, US market research firm IHS expects prices for fracking services to fall 35 percent.
Halliburton is in the process of acquiring smaller rival Baker Hughes in a deal worth around $34.6 billion. The move is projected to create around $2 billion in cost savings and help Halliburton compete with main rival, France’s Schlumberger.