Halliburton Posts Surprise Profit As Expenses Fall
Oct 19 (Reuters) - Halliburton Co, the world's No.2 oilfield services provider, posted a surprise quarterly profit on Wednesday, helped by cost cutting, and said it expected a rise in oil prices to boost rig counts.
U.S. shale oil companies have started putting rigs back to work, with crude prices nearly doubling since their February lows.
The number of active rigs in the United States rose for the seventh straight week through Oct. 14, according to a closely watched report from Baker Hughes Inc.
"North America results improved as we took advantage of the rig count growth by increasing utilization, working our surface efficiency model and relentlessly managing costs," Chief Executive Dave Lesar said in a statement.
Halliburton's revenue from North America, which accounts for more than 40 percent of its total business, rose 9 percent from the second quarter.
Operating results from the region improved by $58 million, representing 41 percent incremental margins. Brokerage Simmons & Co had estimated margins of 21 percent.
"3Q margin performance will help provide further confidence in eventually returning margins back to normal levels," Wells Fargo analyst Judson Bailey said in a note.
However, Halliburton said it expected pricing pressure to continue globally and that fourth-quarter results from its international business were likely to be flat, compared with the latest quarter.
The company also said activity in the current quarter was expected to be weak due to holiday and seasonal weather-related downtimes.
This "does not change our view that things are getting better," Lesar said.
Halliburton, like bigger rival Schlumberger, has been slashing costs to make up for falling revenue. The company said in July it would reduce "structural costs" by about 25 percent, or $1 billion, on an annual run-rate basis by the end of 2016.
Profit attributable to Halliburton was $6 million, or 1 cent per share, in the third quarter, compared with a loss of $54 million, or 6 cents per share, a year earlier.
Revenue fell 31.3 percent to $3.83 billion.
Analysts on average had estimated a loss of 6 cents per share and revenue of $3.90 billion, according to Thomson Reuters I/B/E/S.
Market leader Schlumberger is scheduled to report on Thursday and Baker Hughes Inc, the world's third-largest oilfield service firm, is scheduled to report on Tuesday.
Shares of Halliburton, the market leader in fracturing, cementing and completion services, rose marginally to $47.50 in premarket trading.
(Reporting by Anet Josline Pinto and Arathy S Nair in Bengaluru; Editing by Anil D'Silva)
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