Halliburton Profit Beats Estimates As Costs Cuts Pay Off



Halliburton reports a better-than-expected quarterly profit as costs cuts helped offset the impact of a steep drop in drilling activity.
Halliburton reports a better-than-expected quarterly profit as costs cuts helped offset the impact of a steep drop in drilling activity.

Reuters

July 20 (Reuters) - Halliburton Co, the world's No.2 oilfield services provider, reported a better-than-expected quarterly profit as costs cuts helped offset the impact of a steep drop in drilling activity.

The company also said it was "fully committed" to completing its takeover of smaller rival Baker Hughes Inc, after the U.S. Department of Justice extended its review of the deal.

Halliburton's shares rose 3 percent to $41.25 in premarket trading on Monday.

The Halliburton-Baker Hughes deal is facing stiff regulatory scrutiny because the companies have overlapping businesses in the United States, Asia and Europe.

Halliburton has put up three drilling businesses for sale to alleviate regulatory concerns and said on Monday it was "pleased with the prices and level of interest" it had received.

The company was confident of achieving cost synergies of nearly $2 billion from the deal regardless of market conditions or cost cuts moves made by either company to date, Chief Executive Dave Lesar said in a statement.

The company and its peers have been cutting costs and laying off thousands of workers in response to lower drilling activity globally due to the slump in crude oil prices.

Halliburton's revenue from North America slumped 38.5 percent in the second quarter ended June 30. Revenue from outside the region fell only 12 percent. North America accounts for 45 percent of the company's revenue.

Total revenue slumped 26.5 percent to $5.92 billion, but beat analysts' average estimate of $5.78 billion.

Halliburton's net profit slumped 93 percent to $53 million, or 6 cents per share. Excluding charges related to the pending Baker Hughes deal and other items, adjusted profit was 44 cents.

According to Thomson Reuters I/B/E/S, the company earned 38 cents per share, excluding depreciation cessation on assets held for sale, deal-related costs, impairments and other charges. That was higher than analysts' average estimate of 29 cents.

Through Friday's close of $39.99, Halliburton's shares have fallen about 44 percent in the last 12 months, compared with a 38 percent fall in the Dow Jones U.S. oil equipment and services companies index.

(Reporting by Amrutha Gayathri in Bengaluru; Editing by Sriraj Kalluvila and Savio D'Souza)



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