Pricing & Activity Headwinds May Stall Halliburton's Q1 Results

(RTTNews) - Oilfield services provider Halliburton Co. (HAL) is likely to report its first-quarter numbers before the bell on Monday, April 25, with analysts polled by Thomson Reuters estimating earnings of $0.04 per share on revenue of $4.17 billion.

Q1 Results May Reflect:

- Activity declines and pricing headwinds, primarily in North America - Lower activity levels in Saudi Arabia and Iraq - Sharp reduction of activity in the North Sea, partially offset by higher activity in Angola and Algeria - Reduced activity throughout the US land, especially in the pumping-related product lines.

Meanwhile, the company expects activity in the Middle East, Asia region to again be the most resilient in 2016 as recent mature field project awards throughout the Middle East are anticipated to move forward.

Also, fiscal 2016 is expected to be a very challenging year due to poor commodity prices and shrinking customer budgets.

While reporting fourth-quarter results, Dave Lesar, Chairman and CEO said, "2016 is expected to be another challenging year for the industry. We believe our customers will remain focused on cost per barrel optimization and gaining higher levels of efficiency, both of which bode very well for Halliburton."

In the last quarter...

The company incurred a loss for the fourth quarter on sharply lower revenues and company-wide charges related primarily to asset write-offs and severance costs amid the downturn in the oil industry. Adjusted earnings for the quarter beat analysts' estimates, while revenues missed their expectations.

Halliburton, which is in a deal to acquire smaller peer Baker Hughes, recorded company-wide charges related primarily to asset write-offs and severance costs of about $0.22 per share in the quarter. The company also recorded Baker Hughes acquisition-related costs of $0.09 per share in the quarter.

The company's net loss for the fourth quarter was $28 million or $0.03 per share, compared to net income of $901 million or $1.06 per share in the year-ago period.

Excluding items, adjusted income from continuing operations for the quarter was $270 million or $0.31 per share. Analysts expected earnings of $0.24 per share.

Total revenue for the quarter declined 42% to $5.08 billion from $8.77 billion in the year-ago period. Analysts expected revenue of $5.11 billion.

Quarterly revenues for the completion and production segment decreased 48% from the year-ago period to $2.83 billion. Drilling and Evaluation revenue declined 32% from last year to $2.25 billion.