Halliburton Q3 Profit Tops View, But Revenue Miss

(RTTNews) - Oilfield services provider Halliburton Co. (HAL) reported Monday a profit for the third quarter that grew from last year, reflecting record quarterly revenues at both its operating segments and most regions. Adjusted earnings per share from continuing operations topped analysts' expectations by a penny, while quarterly revenues missed their estimates. Looking ahead, the company said it expects margin improvement during 2014.

"I am pleased with our third quarter results; total company revenue of $7.5 billion was a record quarter for Halliburton. Both our Drilling & Evaluation and Completion & Production divisions set quarterly revenue records, with our Baroid, Completion Tools, Drill Bits and Testing product lines setting quarterly operating income records," Chairman, President and CEO Dave Lesar said in a statement.

The Houston, Texas-based company reported net income of $706 million or $0.79 per share for the third quarter, higher than $602 million or $0.65 per share in the prior-year quarter.

Results for the latest quarter include severance charges and asset write-offs of about $0.04 per share related to the adjustments to headcount and other assets based on the progress of strategic Battle Red and Frac of the Future initiatives.

Excluding restructuring charges, adjusted income from continuing operations for the latest quarter was $745 million or $0.83 per share.

On average, 31 analysts polled by Thomson Reuters expected the company to report earnings of $0.82 per share for the third quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter grew to $7.47 billion from $7.11 billion in the same quarter last year, but missed twenty-one Wall Street analysts' consensus estimate of $7.50 billion by a whisker.

Revenues were boosted by revenue and operating income growth across most of the segments and international regions. The North American region was relatively weaker that other regions.

Quarterly revenues for completion and production segment increased to $4.50 billion from $4.29 billion as well as drilling and evaluation segment revenues grew to $2.97 billion from last year's $2.82 billion.

"Our international business continues to deliver strong growth. On a year-to-date basis, our Eastern Hemisphere growth continues to lead our peer group. Compared to the third quarter of 2012, Eastern Hemisphere revenue and adjusted operating income grew 17% and 30%, respectively," Lesar stated.

Lesar aded that, "In the Middle East / Asia region, reduced activity in Australia and Malaysia, as well as lower profitability in Iraq, was partially offset by higher activity in Saudi Arabia."

During the third quarter, the company repurchased about 68 million shares of its common stock at an aggregate cost of $3.3 billion pursuant to a modified Dutch auction cash tender offer.

Looking ahead, the company said it expects the fourth quarter in the Eastern Hemisphere to be its strongest quarter of the year, due to seasonal year-end software and equipment sales, with margins in the high teens.

However, the company added that it anticipates margin improvement during 2014 as Gulf of Mexico activity expands, it deploys Battle Red and Frac of the Future initiatives, and it continues to see revenue gains as unconventional service intensity improves.

HAL closed Friday's regular trading session at $52.47, up $0.08 on a volume of 12.04 million shares. In the past 52-week period, the stock has been trading in a range of $29.83 to $52.93.