Halliburton records a 25% lower revenue in North America

Written by: Wajeeh Khan
April 28, 2020
  • Halliburton records £820 million in net loss in the quarter that ended on 31st March.
  • The U.S oilfield services company books £890 million impairment charge in the first quarter.
  • The oil and gas company cuts its capital expenditures by £800 million in 2020.

Halliburton Co. (NYSE: HAL) released its quarterly financial results on Monday. The U.S oil and gas company printed £820 million (93 pence per share) in a net loss in the first quarter that came out significantly lower than £122 million (14 pence per share) in profit that it recorded in the same quarter last year.

According to Halliburton, the downbeat performance was largely attributed to the unprecedented drop in global oil prices and an £890 million impairment charge.

Oil Prices Have Declined Over 60% Since January

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Oil prices have declined over 60% since the start of the year. The current price, as per shale drillers, is lower than what is required for them to break-even. Oilfield services companies like Halliburton, Baker Hughes, and Schlumberger, therefore, have resorted to temporarily suspending drilling and announcing massive cost-cuts as demand for such services remains under pressure.

Halliburton derives the majority of its business from North America. In the quarter that ended on 31st March, the company posted a 25% lower revenue at £1.98 billion in North America. Internationally, its revenue was recorded at £2.08 billion that marked a 5% decline as compared to the year-ago figure.

The American multinational corporation had announced plans of cutting its 2020 capital expenditures in March. On Monday, the company said that it will reduce such expenditures by £644 million this year while an additional cut worth £800 million is also expected on overhead and related costs.

Halliburton’s rival, Schlumberger, posted a £6.84 billion (at the time of writing) impairment charge last week and reduced its quarterly dividend by 75%. Baker Hughes also announced a 20% cut to its 2020 expenditures recently.

Halliburton Makes 25 Pence Of Earnings Per Share In Q1

Halliburton’s report on Monday also highlighted the company to have made 25 pence of earnings (excluding charges) per share in the first quarter. According to Refinitiv, analysts had their estimate for EPS (earnings per share) capped at 19 pence per share.

CEO Jeff Miller of Halliburton commented on the earnings report on Monday:

“We expect activity in North America land to sharply decline during the second quarter and remain depressed through year-end, impacting all basins.”

At the time of writing, Halliburton is exchanging hands at £6.03 per share in the stock market that translates to around 70% decline in 2020 so far. The oilfield services company is currently valued at £5.33 billion.