Oilfield services provider Halliburton Co. (HAL, HAL.TO, HAL.F) Monday reported a loss for the first quarter, weighed down by charges related to the Macondo litigation. Adjusted earnings and revenue topped estimates. The stock is gaining nearly 5 percent in pre-market activity.
Halliburton did the cementing work for BP Plc.'s (BP, BP.L) Macondo well that exploded in the Gulf of Mexico on April 21, 2010.
The company said it recently participated in court-facilitated settlement discussions to resolve a substantial portion of private claims, as it believes that an early and reasonably-valued resolution is in the best interests of shareholders.
Dave Lesar, chairman, president and CEO, said, ''I am pleased with our operational results, as total company revenue of $7.0 billion represents a record Halliburton first quarter. The rig count decline and pricing headwinds in North America were more than offset by our expanding international business.''
Net loss attributable to the company for the quarter was $18 million or $0.02 per share, compared to a profit of $627 million or $0.68 per share in the previous year. Loss from continuing operations was $13 million or $0.01 per share, compared to a profit of $635 million or $0.69 per share last year.
Excluding a $0.68 per share charge to increase a reserve related to the Macondo litigation, income from continuing operations was $624 million or $0.67 per share. Adjusted income from continuing operations totaled $0.89 per share last year. On average, 32 analysts polled by Thomson Reuters expected earnings per share of $0.57 for the quarter. Analysts' estimates typically exclude one-time items.
Total revenue for the quarter increased to $6.974 billion from $6.868 billion in the prior year. Analysts expected revenues of $6.88 billion.
Completion and Production or C&P revenue fell 4 percent to $4.1 billion, amid lower demand for stimulation activities in the U.S. land market that drove the decline, as pricing pressures and reduced operator activities continued to impact the market.
Drilling and Evaluation or D&E revenue climbed 11 percent to $2.9 billion, as higher drilling activities in the international regions more than offset the decline in North America.
According to the company, based on product-lines, the Sperry Drilling, Multi-Chem and Baroid product lines achieved record quarterly revenues.
Regionally, revenue in North America fell over 11 percent to $3.706 billion. ''We also saw activity levels benefit from shifts to pad well activity and improved utilization around 24-hour operations. We believe that modest rig count improvements, coupled with a continued drive towards efficiency, will bode very well for us in the coming years...,'' Lesar added.
Revenues were higher by 21 percent in Latin America at $945 million, but operating income fell due to several one-time items, including severance costs in Argentina, mobilization costs on new contracts in Brazil, and a reduction in the rig count on Mexico projects. Halliburton expects margins to improve moderately in the second quarter, and average in the upper teens for the second half of the year.
Europe/Africa/CIS revenues rose 17 percent to $1.187 billion, amid higher activity levels in the North Sea, Eurasia, Nigeria, and Central Africa markets.
Middle East/Asia revenues increased 25 percent to $1.136 billion, led by growth in the Australia, China, and Saudi Arabia markets.
HAL closed at $37.21 on Friday. The stock is gaining nearly 5 percent in pre-market activity at $39.06.
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