Energy

Halliburton Company Earnings Point at New 52-Week High

Drilling Rig
Source: Thinkstock
Halliburton Co. (NYSE: HAL) reported first-quarter 2014 results before markets opened Monday. For the quarter, the oil and gas services company posted adjusted diluted earnings per share (EPS) of $0.73 on revenues of $7.3 billion. In the same period a year ago, the company reported EPS of $0.67 on revenues of $7.0 billion. First-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $0.71 and $7.24 billion in revenues.

The company did not provide guidance in its earnings release, but the second-quarter consensus estimates call for EPS of $0.91 on revenues of $7.75 billion. For the full year, EPS is estimated at $3.94 on revenues of $31.77 billion.

Halliburton said that its income from operations in the eastern hemisphere, which includes its Middle East/Asia and Europe/Africa/CIS groups, grew by 11% year-over-year and the company expects full-year growth in the low double-digits. In Latin America, revenue was dropped by 9%, and for the full year Halliburton expects revenue to be flat with last year.

In North America revenues grew by 5% sequentially and operating income was flat year-over-year. Halliburton said that results took a hit from lower price for the company’s pressure pumping services and from weather-related issues and higher logistics costs.

The company’s CEO said:

Our strategy is working well and we intend to stay the course. I am optimistic about our ability to grow our North America revenue and margins, and to realize industry-leading revenue and margin growth in our international business, resulting in solid EPS growth and significantly higher cash generation. We expect earnings per share to grow approximately 25% in the second quarter, with further increases to follow.

Ignoring a $1.12 billion non-operating loss in the first quarter of 2013, operating income rose from $1.02 billion in the first quarter of 2013 to $1.06 billion in 2014. North American operating income slipped by about 0.4%, Latin American income fell by 8.3%, while Europe/Africa/CIS came up about 20% and Middle East/Asia posted a gain of around 13%.

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Competitors Baker Hughes Inc. (NYSE: BHI) and Schlumberger Ltd. (NYSE: SLB) posted third-quarter earnings last Thursday and both set new 52-week highs on numbers that were in line with Halliburton’s. North America contributes 53% of Halliburton’s revenues and about two-thirds of its operating profits, a bigger share than either of its large competitors. Increased pricing pressure in North America has hurt Halliburton more than it has the company’s peers.

Halliburton shares were up 0.7% in premarket trading Monday to $61.30, in a 52-week range of $36.77 to $61.46. The high was set last week and could be moved higher still today. Thomson Reuters had a consensus analyst price target of around $67.25 before this report.

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