Market Overview

Halliburton Announces First Quarter 2019 Results

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  • Reported net income of $0.17 per diluted share
  • Adjusted net income of $0.23 per diluted share, excluding impairments
    and other charges

Halliburton Company (NYSE:HAL) announced today net income of $152
million, or $0.17 per diluted share, for the first quarter of 2019. This
compares to net income for the first quarter of 2018 of $46 million, or
$0.05 per diluted share. Adjusted net income for the first quarter of
2019, excluding impairments and other charges, was $201 million, or
$0.23 per diluted share. This compares to adjusted net income for the
first quarter of 2018, excluding impairments and other charges, of $358
million, or $0.41 per diluted share. Halliburton's total revenue in the
first quarter of 2019 was $5.7 billion, essentially flat year over year.
Reported operating income was $365 million during the first quarter of
2019, a 3% increase compared to reported operating income of $354
million in the first quarter of 2018. Excluding impairments and other
charges, adjusted operating income was $426 million for the first
quarter of 2019 and $619 million for the first quarter of 2018.

"Our results for the first quarter played out as we expected and I'm
pleased with how our organization executed both in North America and
internationally. We continued to collaborate with our customers to
engineer solutions that maximize their asset value," commented Jeff
Miller, Chairman, President and CEO.

"Total company revenue of $5.7 billion was essentially flat compared to
the first quarter of 2018, and adjusted operating income was $426
million.

"As expected, the first quarter activity levels in North America were
modestly higher compared to the first quarter of 2018, and we
experienced pricing headwinds throughout the quarter. We believe the
worst in the pricing deterioration is now behind us. For the next couple
of quarters, I see demand for our services progressing modestly.

"International revenue increased 11% year over year, which was a great
first step towards our expectation of high single-digit international
growth for all of 2019. Broad-based recovery continues across all
regions, and we expect this momentum to build going into 2020.

"Halliburton is well positioned to navigate the near-term and thrive in
the long run. We will achieve that through responsible capital
stewardship, prioritizing capital efficiency, investing in the
technologies that deliver differentiation, and generating strong cash
flow and returns," concluded Miller.

Operating Segments

Completion and Production

Completion and Production revenue in the first quarter of 2019 was $3.7
billion, a decrease of $145 million, or 4%, when compared to the first
quarter of 2018, while operating income was $368 million, a decrease of
$132 million, or 26%. These decreases were primarily driven by lower
pricing for stimulation services in U.S. land, partially offset by
higher artificial lift and cementing activity in U.S. land, increased
stimulation activity in Latin America, and higher completion tool sales
in Middle East/Asia and Latin America.

Drilling and Evaluation

Drilling and Evaluation revenue in the first quarter of 2019 was $2.1
billion, an increase of $142 million, or 7%, when compared to the first
quarter of 2018, with activity improvements across all geographic
regions. These increases primarily related to higher logging and project
management activity globally and improved fluids activity in Latin
America. Operating income was $123 million, a decrease of $65 million,
or 35%, resulting primarily from mobilization costs that we incurred on
multiple drilling projects internationally, coupled with reduced project
management activity and lower pricing in the Middle East.

Geographic Regions

North America

North America revenue in the first quarter of 2019 was $3.3 billion, a
7% decrease compared to the first quarter of 2018. This decrease was
primarily driven by lower pricing for stimulation services in U.S. land,
partially offset by higher artificial lift, cementing and stimulation
services activity.

International

International revenue in the first quarter of 2019 was $2.5 billion, an
11% increase year over year, resulting primarily from increased
stimulation and fluids activity in Latin America, coupled with higher
completion tool sales in the Middle East/Asia and improved logging
activity in Europe/Africa/CIS. These improvements were partially offset
by reduced fluids activity in the Middle East.

Latin America revenue in the first quarter of 2019 was $587 million, a
28% increase year over year, resulting primarily from higher activity
for the majority of Halliburton's product service lines in Mexico,
higher stimulation activity in Argentina and improved fluids activity
throughout the region. This was partially offset by reduced drilling and
testing activity in Brazil.

Europe/Africa/CIS revenue in the first quarter of 2019 was $748 million,
a 4% increase year over year, primarily driven by higher activity across
multiple product service lines in Ghana and the United Kingdom. These
results were partially offset by lower drilling related activity in
Azerbaijan.

Middle East/Asia revenue in the first quarter of 2019 was $1.1 billion,
a 7% increase year over year, largely resulting from higher completion
tool sales across the region, coupled with increased project management
activity in India and improved drilling activity in the Middle East.
These improvements were partially offset by reduced fluids activity and
lower pricing in the Middle East.

Selective Technology & Highlights

  • Halliburton announced it will build the first oilfield chemical
    manufacturing plant in Saudi Arabia. Upon the plant's completion in
    2020, Halliburton will begin local manufacturing of a broad slate of
    specialty chemicals for stimulation, production, midstream and
    downstream engineering treatment programs to help customers achieve
    production and reliability goals in applications from the reservoir to
    the refinery.
  • Halliburton signed a Memorandum of Understanding with the Egyptian
    Ministry of Petroleum & Mineral Resources to support a specialized
    development program for Egypt's middle management and young
    professional employees. The Memorandum is a collaborative agreement
    under which Halliburton will utilize its strength in human capital
    development to provide on-the-job training for Egyptians who show the
    potential to be future leaders in the oil and gas industry.
    Additionally, Halliburton will customize a development program for
    select participants to enhance their capabilities and assist Egypt in
    its role as a leading regional oil and gas hub.
  • Halliburton introduced a Motors Center of Excellence, a new approach
    to drilling motor development that combines specialized engineering
    and manufacturing capabilities to customize motor designs for specific
    basin challenges. By establishing a dedicated team of scientists in
    polymer chemistry, materials, bearing and power section design,
    Halliburton can accelerate research and development activities to
    deliver leading drilling motors to the industry.
  • Halliburton announced the execution of an integrated services contract
    with Royal Dutch Shell for post-salt development and pre-salt
    exploration in Brazil's Campos and Santos Basins. Under the contract,
    which includes a three-year term with a two-year extension,
    Halliburton will provide drilling services to drive greater efficiency
    by integrating multiple product offerings and technologies.
    Halliburton has an established track record in Brazil's pre-salt
    fields, which have some of the most complex wells ever drilled and
    require a broad scope of technologies and capabilities to achieve
    economical and operational success.
  • Dr. M. Katherine Banks and Ms. Patricia Hemingway Hall have been named
    to the Company's board of directors. The appointments were effective
    February 13, 2019, and both will stand for election by shareholders at
    the annual meeting on May 15, 2019. "With Katherine and Pat, we
    strengthen our board with one leader who has extensive experience in
    engineering and technology and another who served as a CEO in the
    rapidly changing healthcare industry and has substantial corporate
    governance experience," said Jeff Miller, Halliburton chairman,
    president and CEO.

About Halliburton

Founded in 1919, Halliburton celebrates its 100 years of service as one
of the world's largest providers of products and services to the energy
industry. With 60,000 employees, representing 140 nationalities in more
than 80 countries, the company helps its customers maximize value
throughout the lifecycle of the reservoir — from locating hydrocarbons
and managing geological data, to drilling and formation evaluation, well
construction and completion, and optimizing production throughout the
life of the asset. Visit the company's website at www.halliburton.com.
Connect with Halliburton on Facebook,
Twitter,
LinkedIn,
Instagram
and YouTube.

NOTE: The statements in this press release that are not historical
statements, including statements regarding future financial performance,
are forward-looking statements within the meaning of the federal
securities laws. These statements are subject to numerous risks and
uncertainties, many of which are beyond the company's control, which
could cause actual results to differ materially from the results
expressed or implied by the statements. These risks and uncertainties
include, but are not limited to: the continuation or suspension of our
stock repurchase program, the amount, the timing and the trading prices
of Halliburton common stock, and the availability and alternative uses
of cash; changes in the demand for or price of oil and/or natural gas;
potential catastrophic events related to our operations, and related
indemnification and insurance matters; protection of intellectual
property rights and against cyber-attacks; compliance with environmental
laws; changes in government regulations and regulatory requirements,
particularly those related to oil and natural gas exploration,
radioactive sources, explosives, chemicals, hydraulic fracturing
services, and climate-related initiatives; the impact of federal tax
reform, compliance with laws related to income taxes and assumptions
regarding the generation of future taxable income; risks of
international operations, including risks relating to unsettled
political conditions, war, the effects of terrorism, foreign exchange
rates and controls, international trade and regulatory controls and
sanctions, and doing business with national oil companies;
weather-related issues, including the effects of hurricanes and tropical
storms; changes in capital spending by customers; delays or failures by
customers to make payments owed to us; execution of long-term,
fixed-price contracts; structural changes and infrastructure issues in
the oil and natural gas industry; maintaining a highly skilled
workforce; availability and cost of raw materials; agreement with
respect to and completion of potential acquisitions and integration and
success of acquired businesses and operations of joint ventures.
Halliburton's Form 10-K for the year ended December 31, 2018, recent
Current Reports on Form 8-K, and other Securities and Exchange
Commission filings discuss some of the important risk factors identified
that may affect Halliburton's business, results of operations, and
financial condition. Halliburton undertakes no obligation to revise or
update publicly any forward-looking statements for any reason.

   

HALLIBURTON COMPANY

Condensed Consolidated Statements of Operations

(Millions of dollars and shares except per share data)

(Unaudited)

 
Three Months Ended
March 31   December 31
      2019   2018   2018
Revenue:    
Completion and Production $ 3,662 $ 3,807 $ 3,832
Drilling and Evaluation     2,075     1,933     2,104  
Total revenue     $ 5,737     $ 5,740     $ 5,936  
Operating income:
Completion and Production $ 368 $ 500 $ 496
Drilling and Evaluation 123 188 185
Corporate and other (65 ) (69 ) (73 )
Impairments and other charges (a)     (61 )   (265 )    
Total operating income  
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