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Halliburton (HAL) Slips to Loss in Q2, Beats on Revenues
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Major oilfield services provider, Halliburton Company (HAL - Free Report) reported narrower-than-expected second-quarter 2016 loss following higher fluid works and improved pipeline services in the North Sea. However, lower pricing and reduced global activities – especially North American pressure pumping works – hurt results significantly over the year-ago quarter.
Loss per share from continuing operations came in at 14 cents, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The company had posted profits of 44 cents in second-quarter 2015.
Halliburton is the first member of the ‘big 4 oil service companies’ to come up with second-quarter earnings. Baker Hughes Inc. , Schlumberger Ltd (SLB - Free Report) and Weatherford International Ltd – the other members – are expected to release earnings on Jul 28, Jul 21 and Jul 27, respectively.
Halliburton’s revenues of $3,835 million surpassed the Zacks Consensus Estimate of $3,744 million owing to higher sales of completion tools in Nigeria. However, the top line witnessed a 35.2% year-over-year decline.
During the quarter, North America accounted for approximately 39.5% of Halliburton’s total revenues.
Segmental Performance
Revenues at Halliburton’s Completion and Production segment came in at $2.1 billion, down 38.2% year over year and almost 9% sequentially. Lower prices of product service lines and pressure pumping works in North America did the damage. However, the negatives were partially offset by higher sales of completion tools in Nigeria and improved the North Sea pipeline services.
The segment’s operating loss came in at $32 million while it had reported profits of $313 million and $30 million, the year-ago and prior quarter, respectively. Lower pricing and reduced global activities – especially North American pressure pumping works – played foul this time around.
Revenues at Halliburton’s Drilling & Evaluation business came in at $1.7 billion, 32% below the second-quarter 2015 level and almost 11% less than the prior quarter. Lower pricing, record low rig counts and constraints in customer budgets affected the results. This was negated to some extent by higher fluid works in the North Sea.
Moreover, the segment’s operating income fell 62% from the year-ago quarter and 36% from first-quarter 2016 to $154 million due to reduced activities and pricing weakness primarily in North America and Middle East/Asia.
Balance Sheet
Halliburton’s capital expenditure in the second quarter totaled $213 million. As of Jun 30, 2016, the company had approximately $3.1 billion in cash/cash equivalents and $12.2 billion in long-term debt, representing a debt-to-capitalization ratio of 56.9%.
Outlook
Halliburton expects rig count to increase modestly during the second half of 2016 which should push up North American activities.
Halliburton currently carries a Zacks Rank #3 (Hold), implying that to the stock will perform in line with the broader U.S. equity market over the next one to three months.
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Halliburton (HAL) Slips to Loss in Q2, Beats on Revenues
Major oilfield services provider, Halliburton Company (HAL - Free Report) reported narrower-than-expected second-quarter 2016 loss following higher fluid works and improved pipeline services in the North Sea. However, lower pricing and reduced global activities – especially North American pressure pumping works – hurt results significantly over the year-ago quarter.
Loss per share from continuing operations came in at 14 cents, narrower than the Zacks Consensus Estimate of a loss of 19 cents. The company had posted profits of 44 cents in second-quarter 2015.
Halliburton is the first member of the ‘big 4 oil service companies’ to come up with second-quarter earnings. Baker Hughes Inc. , Schlumberger Ltd (SLB - Free Report) and Weatherford International Ltd – the other members – are expected to release earnings on Jul 28, Jul 21 and Jul 27, respectively.
Halliburton’s revenues of $3,835 million surpassed the Zacks Consensus Estimate of $3,744 million owing to higher sales of completion tools in Nigeria. However, the top line witnessed a 35.2% year-over-year decline.
During the quarter, North America accounted for approximately 39.5% of Halliburton’s total revenues.
Segmental Performance
Revenues at Halliburton’s Completion and Production segment came in at $2.1 billion, down 38.2% year over year and almost 9% sequentially. Lower prices of product service lines and pressure pumping works in North America did the damage. However, the negatives were partially offset by higher sales of completion tools in Nigeria and improved the North Sea pipeline services.
The segment’s operating loss came in at $32 million while it had reported profits of $313 million and $30 million, the year-ago and prior quarter, respectively. Lower pricing and reduced global activities – especially North American pressure pumping works – played foul this time around.
Revenues at Halliburton’s Drilling & Evaluation business came in at $1.7 billion, 32% below the second-quarter 2015 level and almost 11% less than the prior quarter. Lower pricing, record low rig counts and constraints in customer budgets affected the results. This was negated to some extent by higher fluid works in the North Sea.
Moreover, the segment’s operating income fell 62% from the year-ago quarter and 36% from first-quarter 2016 to $154 million due to reduced activities and pricing weakness primarily in North America and Middle East/Asia.
Balance Sheet
Halliburton’s capital expenditure in the second quarter totaled $213 million. As of Jun 30, 2016, the company had approximately $3.1 billion in cash/cash equivalents and $12.2 billion in long-term debt, representing a debt-to-capitalization ratio of 56.9%.
Outlook
Halliburton expects rig count to increase modestly during the second half of 2016 which should push up North American activities.
HALLIBURTON CO Price, Consensus and EPS Surprise
HALLIBURTON CO Price, Consensus and EPS Surprise | HALLIBURTON CO Quote
Zacks Rank
Halliburton currently carries a Zacks Rank #3 (Hold), implying that to the stock will perform in line with the broader U.S. equity market over the next one to three months.
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