Halliburton’s Quarterly Earnings Beats Street’s Forecast, Shares Gain (HAL)
NYSE: HAL) reported 35% drop in fiscal fourth-quarter earnings; however, shares climbed nearly 4% in premarket trade as quarterly results beat Street’s expectations, thanks to higher margins fetched from international markets which offset weakness in North America.
In the backdrop of natural gas glut in the U.S and unusually warm winter, natural gas prices remained depressed in 2012 which in turn hit margins, putting lid on drilling activities.
Halliburton’s operating income North American region plunged 58% in the latest quarter.
The weakness in natural gas industry is likely to continue this year as well. Many oil and gas companies, according to Reuters, are not inclined to invest anything more than what they spent last year.
“In 2013, we anticipate the North America rig count will improve from fourth quarter levels but will be down slightly compared to 2012,” said David Lesar, Halliburton’s Chief Eceutive, in a statement.
However, robust drilling activities in the MENA region (Middle East and Africa), Asia along with Europe, helped Halliburton to make for the rather lull period in North America.
For the latest quarter, Halliburton’s net income from continuing operations came at $589 million, or 63 cents a share, beating analysts’ consensus estimate for earnings of 60 cents a share, according to data compiled by Thomson Reuters.
Revenue for the period rose 3 percent to $7.3 billion, bettering Wall Street estimates of $7.06 billion.
In the completion and production division, revenue inched up 0.2%, while operating income contracted 45%.
In the drilling and evaluation division, revenue climbed 7.9% and operating income rose 0.8%.
Just last week, Halliburton’s rival Schlumberger Ltd. (NYSE: SLB) also reported drop in earnings as revenue shrunk in the North American region due to a slowdown in the natural gas industry.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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