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Halliburton Q1 Profit Rises; Sees Margin Pressure In North America

Oilfield services firm Halliburton Co. (HAL: Quote, HAL.TO, HAL.F) on Wednesday reported a higher profit for the first quarter, but said lower natural gas prices caused disruptions to its supply chain. The company cautioned it could see margin pressure in North America in the second quarter due to additional gas rig dislocation, cost inflation, pricing pressure and the impact of spring breakup in Canada.

Terming the natural gas rig dislocation impact as 'transient', CEO Dave Lesar said the issues will negatively impact the company's North America margins by 200 to 250 basis points in the second quarter.

In the first quarter, net income from continuing operations attributable to company shareholders grew to $635 million or $0.69 per share from $512 million or $0.56 per share a year ago.

The results included $0.20 per share for an estimated loss contingency related to the Macondo well incident in the Gulf of Mexico two years ago.

On an adjusted basis, income from continuing operations attributable to company climbed to $826 million or $0.89 per share from $558 million or $0.61 per share. On average, 31 analysts polled by Thomson Reuters expected earnings per share of $0.85 for the quarter. Analysts' estimates typically exclude one-time items.

Revenues increased 30 percent to $6.87 billion from $5.28 billion in the first quarter of 2011, with all regions and nearly all product service lines experiencing double-digit percentage revenue. Twenty-four analysts estimated revenues of $6.78 billion for the quarter.

"The steady increase in unconventional oil-directed activity continued in the first quarter, with a 12% increase in the United States oil-directed rig count nearly offsetting the 17% decline in natural gas-directed rig count," Lesar said.

North American revenues climbed 43 percent from last year to $3.18 billion. In Latin America, first-quarter revenue increased by 27 percent, led by Brazil. HAL settled on Tuesday at $32.66, compared to the previous close of $32.06, on a volume of 13.41 million shares.

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by RTT Staff Writer

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