Halliburton’s net loss broadens to £1.35 billion in the second quarter

Written by: Wajeeh Khan
July 20, 2020
  • Halliburton’s net loss broadens to £1.35 billion in the second quarter.
  • Q2 marks the third consecutive quarter of loss for Halliburton.
  • The oilfield services provider reports a 53% decline in Q2 operating income.

Halliburton Co (NYSE: HAL) published its quarterly financial results on Monday that highlighted the company to have booked an impairment charge of £1.66 billion in the second quarter. The company attributed its dovish performance to the Coronavirus pandemic and lower oil prices at large that resulted in its North American business seeing significant weakness in demand.

Shares of the company were reported about 1% down in premarket trading on Monday. At £10.10 per share, Halliburton is roughly 45% down year to date in the stock market after recovering from an even lower £3.65 per share in March. Learn more about value investing strategy.

Q2 marks the third consecutive quarter of loss for Halliburton

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At £1.35 billion, the oilfield services provider’s net loss that translated to £1.51 per share in the second quarter was in sharp contrast to £59.45 million of profit or 7.13 pence a share in the same quarter last year. Q2 marked the third consecutive quarter of loss for Halliburton.

Excluding charges, however, Halliburton made 3.96 pence of earnings per share in the recent quarter. In comparison, the company had noted 24.57 pence of adjusted earnings per share in the fiscal first quarter. The American multinational corporation recently inked a strategic agreement with Microsoft and Accenture to enhance digital capabilities.

In its report on Monday, the Houston-based company also registered £474 million of cash flow attributed to operating activities and £361.45 million of free cash flow. In terms of revenue, Halliburton saw a massive 37% decline to £2.54 billion in Q2 versus £3.96 billion in the first quarter.

Halliburton reports a 53% decline in operating income in Q2

According to the oil services company, its reported operating loss also widened from £452.61 million in Q1 to £1.51 billion in the recent quarter. On an adjusted basis, its operating income came in at £187.07 million in Q2 that represented a 53% decline versus the first-quarter figure of £397.92 million.

CEO Jeff Miller of Halliburton commented on the financial results on Monday and said:

“Halliburton’s second-quarter performance in a tough market shows we can execute quickly and aggressively to deliver solid financial results and free cash flow despite a severe drop in global activity. Our results demonstrate a significant and sustainable reset to the power of our business to generate positive earnings and free cash flow.”

At the time of writing, Halliburton has a market capitalisation of £9.09 billion.