Halliburton 2Q profit off 8 pct; tops expectationsAP , Associated Press
Jul. 22, 2013 8:43 AM ET
HOUSTON (AP) — Halliburton's second-quarter profit dropped 8 percent, hurt by a decline in North American revenue, but it edged out Wall Street expectations and shares edged higher in premarket trading Monday.
Halliburton helps other companies produce oil and natural gas both offshore and on land. In the last several quarters, domestic oil drilling has hit levels not seen in more than two decades, but a glut of natural gas has hurt that side of the energy business.
Its stock has risen sharply this year on growth in international revenue and expectations of more drilling and better pricing and profit margins in North America.
Halliburton's growth has slowed sharply in the last four quarters, but it hopes that higher U.S. natural gas prices will help it boost revenue again.
The Houston company is also trying to put the Gulf of Mexico oil spill behind it. Halliburton provided well-cementing services for the BP PLC drilling rig that exploded in April 2010, and money set aside to cover lawsuits from the incident pushed Halliburton to a net loss in the first quarter. Halliburton has been negotiating to settle those claims.
For the quarter ended June 30, Halliburton's net income totaled $679 million, or 73 cents per share. A year ago, earnings were $737 million, or 79 cents per share.
Analysts had been expecting 72 cents per share, according to FactSet.
Overall revenue edged up 1 percent to $7.32 billion from $7.23 billion a year ago, also topping expectations despite an 8 percent revenue slide in North America. Total revenue, even with the decline in North America, was an all-time best for the second quarter.
Halliburton faces growing competition in a contentious part of its business: hydraulic fracturing or "fracking," which is the process of using chemicals and water under high pressure to crack open rock formations and release oil and natural gas. The technique has helped spur production in shale deposits but has come under fire from environmentalists, who charge that it threatens underground water supplies.
Halliburton moved to defuse some of that criticism last week by striking a deal with Nuverra Environmental Solutions Inc. to develop ways to increase the use of recycled wastewater.
And on Friday a landmark federal study showed no evidence that chemicals from the natural gas drilling process had contaminated drinking water aquifers at a western Pennsylvania drilling site. Although the study is ongoing and the results are still preliminary, it was the first independent look at whether toxic chemicals used in fracking pose a threat to people during normal drilling operations.
Shares of Halliburton Co. rose 2 cents to $45.85 before the opening bell.