Halliburton Company : Halliburton 1Q Net Up 23% As North America Revenue Jumps 40%
04/18/2012| 07:37am US/Eastern
Halliburton Co.'s (HAL) first-quarter earnings rose 23% as the oilfield-services company continued to benefit from the shift of rig activity to oil and liquids-rich basins, though margins declined.
A drop in natural gas prices has prompted many energy companies to abandon dry gas drilling and shift activity towards profitable oil-rich shale formations in North America. Halliburton is the top seller of North American hydraulic fracturing, or fracking, services, which crack open deeply buried oil-and-gas-bearing rocks, including shale. But the relocation of oilfield services towards these new areas has created some logistical and cost hurdles that have pressured the company's margins of late.
Halliburton--the second-largest oilfield-services company after Schlumberger Ltd. (SLB)--reported a profit of $627 million, or 68 cents a share, up from $511 million, or 56 cents, a year earlier. Excluding items such as a loss-contingency related to the Macondo well incident, earnings from continuing operations rose to 89 cents from 61 cents. Revenue jumped 30% to $6.87 billion.
Analysts polled by Thomson Reuters had most recently forecast earnings of 85 cents on revenue of $6.78 billion.
Operating margin fell to 14.9% from 15.4%.
North American revenue jumped 40% and its operating income grew 45%, reflecting the steady increase in unconventional oil-directed activity.
Shares were trading 1.7% higher at $33.20 premarket. The stock has fallen 6.7% over the past three months.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283; firstname.lastname@example.org