By Tess Stynes
Halliburton Co. (HAL) swung to a first-quarter loss on a $637
million increase in reserves tied to litigation involving the
Deepwater Horizon disaster, while elsewhere growth in the
oilfield-services company's international activity again helped
offset weakness in North America.
However, shares were up 4.8% at $39.01 in premarket trading as
adjusted earnings and revenue topped expectations and the company
predicted margins would strengthen as the year progresses.
Chairman and Chief Executive Dave Lesar said Halliburton has
"recently participated in court-facilitated settlement discussions
with the goal of resolving a substantial portion of private claims"
related to the Deepwater Horizon incident. "We are pursuing these
settlement discussions because we believe that an early and
reasonably-valued resolution is in the best interests of our
shareholders."
Halliburton, the top seller of services for hydraulic fracturing
used to extract oil and gas from shale energy fields in North
America, has seen its margins pressured lately by higher fracking
costs in oil-rich areas and weakening demand for services in
natural-gas fields.
However, Mr. Lesar said the company's North American business in
the first quarter "began to benefit from lower cost guar, increased
customer activity, internal cost efficiencies, and higher service
intensity." He added the company expects margins to continue to
expand over the course of the year, along with modest pricing
increases.
Halliburton reported a loss of $18 million, or two cents a
share, compared with $627 million, or 68 cents a share, a year
earlier. The latest period included Deepwater Horizon
litigation-related charges of 68 cents.
Revenue increased 1.5% to $6.97 billion as international revenue
climbed 21%, offsetting a decline in North America revenue of
11%.
Analysts polled by Thomson Reuters most recently projected
earnings of 57 cents on revenue of $6.88 billion.
Write to Tess Stynes at tess.stynes@dowjones.com
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