--Halliburton saw international activity and margins grow in the
fourth quarter
--Company expects some recovery in North American rig count in
2013
--Revenue and income in North America fell as exploration and
production companies slowed pace
(Updates with comments from chief executive and analyst, recent
share price, adds details and background throughout)
By Alison Sider and Ben Fox Rubin
Halliburton Co.'s (HAL) fourth-quarter earnings shrank 26% but
beat analysts' expectations as growth in the oilfield-services
company's international activity helped offset weakness in North
America.
Halliburton reported a profit of $669 million, or 72 cents a
share, down from $906 million, or 98 cents a share, a year earlier.
Earnings from continuing operations were 63 cents, down from 98
cents. Revenue improved 3.2% to $7.29 billion.
Analysts polled by Thomson Reuters most recently projected
earnings from continuing operations of 60 cents a share on revenue
of $7.06 billion. Halliburton shares were up close to 5% Friday
morning at $39.65.
Halliburton is the top seller in North America of
hydraulic-fracturing services, a process that consists of injecting
a mix of water, chemicals and sand at high pressure into deeply
buried oil-and-gas-bearing shale rock formations to crack them
open.
Oilfield-services companies saw their margins in North America
squeezed last year as they contended with a shift toward working in
higher-cost oil-rich areas and declining demand for natural-gas
drilling that kept prices for their work low. Many of their
customers, exploration and production companies, pulled back on
activity during the fourth quarter so as not to exhaust their
budgets for the year.
Last week, rivals Schlumberger Ltd. (SLB) and Baker Hughes Inc.
(BHI) said their fourth-quarter earnings fell amid the slowdown in
North American onshore activity.
In a statement, Halliburton Chief Executive Dave Lesar cited an
"unusually high post-Thanksgiving decline in activity levels" in
North America and remaining stock of high-priced guar gum, a
material used in hydraulic fracturing that surged in price last
year due to a shortage. Halliburton's revenue in North America fell
5% from the third quarter and operating income fell 22%.
Halliburton and other services companies have said they expect
more rigs to return to work from fourth-quarter lows, but they say
the full-year count in 2013 will likely remain somewhat lower than
in 2012.
But oilfield-services companies were able to turn to
international markets as sources of drilling activity with strong
margins in the fourth quarter. Halliburton grew its business in
countries such as Mexico and Saudi Arabia during the fourth
quarter.
Simmons analysts wrote in a client note that Halliburton's
international revenue growth from the third to the fourth quarter
was the best of its peers and the best for the company since
2006.
"Halliburton reported the fastest international top line growth
among the three largest diversified [services companies] for both
the fourth quarter and for all of 2012" and the company's margins
in those regiosn were well above expectations, Barclays analyst
James West wrote in a research note.
Write to Alison Sider at alison.sider@dowjones.com and Ben Fox
Rubin at ben.rubin@dowjones.com
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