Halliburton profit beats as higher global drilling offsets weak N.America
Reuters
Published Oct 24, 2023 06:52AM ET
Updated Oct 24, 2023 10:37AM ET
By Arunima Kumar
(Reuters) - Halliburton (NYSE:HAL)'s third-quarter profit beat market expectations on Tuesday as higher international drilling and equipment demand helped overcome weakness in North America.
The increased demand comes as oil and gas companies reinvest their record profits from the market disruption caused by Russia's invasion of Ukraine to intensify the hunt for new offshore and international sources.
"Looking ahead expect to see international activity, directionally higher with market growth in the double-digit range," CEO Jeff Miller said on a call.
International revenue rose 3% to $3.2 billion from a quarter ago on the back of Latin America strength. But North America revenue fell 3%, mainly due to weak demand for its pressure pumping services onshore as well as maintenance and repair work in the Gulf of Mexico.
Energy producers were discouraged to raise output as U.S. WTI crude prices averaged $81.49 a barrel in the July-September quarter, down 12.7% from a year ago.
Weak North America due to holidays and lower efficiencies during winter also led the company to warn that fourth-quarter revenue from completion and production unit could fall by 3%-5% from a quarter ago.
Larger rival SLB on Friday beat third-quarter estimates on strong global oil drilling activity, but was hurt by North American weakness.
"As we go into the first half of next year, I think that we're going to clearly see North America up from here," CEO Miller said.
Halliburton shares, however, fell 3.4% as investors focused more on the company's underwhelming free cash flow than on profit. Its third-quarter cash flow of $511 million missed estimates of many brokerages.
"We view the results as relatively in line; however, this may not be enough to excite short-term investors," ATB Capital Markets analysts said.
Halliburton posted net income of 79 cents per share compared with expectations of 77 cents, according to LSEG data.
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Written By: Reuters
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