Halliburton Profits Buoyed By Fracking Demand
Halliburton (NYSE:HAL) on Wednesday reported higher profits in the first quarter as North American sales reached a record high, sending shares higher in pre-market trading.
First-quarter profit rose to $627 million, or 68 cents a share, from $511 million, or 56 cents a share, in the year-ago period. Excluding one-time items, such as the $300 million charge for estimated losses from BP’s (NYSE:BP) Gulf of Mexico oil spill two years ago, earnings per share were 89 cents for the January-March quarter.
CEO Dave Lesar attributed North American revenue of $4.2 billion to new oil drilling activity in the U.S., which he said helped offset a drop in natural gas drilling. However, Lesar warned that weak natural gas prices and supply chain disruptions could contribute to lower margins in the region in the second quarter.
Halliburton is the market leader in pressure pumping, used in hydraulic fracturing to extract oil and gas from shale. As oil and gas prices soared during the first quarter, producers were driven to expand drilling in North America, the company said. North American revenue jumped 40 percent, and operating income grew 45 percent.
Total revenue for the quarter rose 30 percent to $6.9 billion. However, the company’s operating margin fell to 14.9 percent from 15.4 percent. First-quarter earnings rose 23 percent.