Counting Losses, Halliburton Sees Better Times in H2

Counting Losses, Halliburton Sees Better Times in H2Counting Losses, Halliburton Sees Better Times in H2

Halliburton Co., weighed down by the drilling slump in North America, sees the market turning around in the second half of the year.

The world’s largest provider of hydraulic-fracturing services reported a loss of $3.21 billion, or $3.73 a share, compared with net income of $54 million, or 6 cents, a year earlier, according to a statement Wednesday, Bloomberg reported.

Excluding certain items, the loss was 14 cents a share, better than the 19-cent average loss of 38 analysts’ estimates compiled by Bloomberg. Sales in North America, its largest regional unit, dropped 43% compared to a year earlier.

"We believe the North America market has turned," chief executive officer Dave Lesar said in the statement. "We expect to see a modest uptick in rig count during the second half of the year."

Halliburton, which generates nearly half its sales from the US and Canada, reported a North American operating loss of 8.2%, more than triple its first quarter drop. The company was expected to report as much as a 5% operating loss, according to Andrew Cosgrove, an analyst at Bloomberg Intelligence.

"I don’t think many people had high expectations for the second quarter, given that even in the quarter the rig count was still dropping," Rob Desai, an analyst at Edward Jones in St. Louis who rates the shares a buy and owns none, said in a phone interview. "The outlook was the most important thing."

In May, Halliburton called off a $28 billion merger with Baker Hughes Inc. after facing stiff resistance from regulators in the US and Europe over antitrust concerns. The company paid Baker Hughes a $3.5 billion breakup fee during the second quarter.

Chief financial officer Mark McCollum said at an investor conference last month that the company has a "need to really hit the brakes" in Venezuela because it is not getting paid for the work being done there.

The company said in May the amount it was owed in the country rose 7.4% in the first quarter to $756 million.

"With oil prices down over the last couple of years, it’s been a little bloody, particularly in the oilfield services and drilling sector," said Doug Edman, director of investments at Brandes Investment Partners. "It’s still a very tough environment."