Halliburton closes 2018 with a £1.28bn profit despite weaker demand

Jeff Miller, Halliburton CEO
Jeff Miller, Halliburton CEO

Houston oil field service giant Halliburton finished 2018 with a £1.28 billion profit and beat Wall Street expectations despite weaker demand for its hydraulic fracturing services in North America.

The company posted a £516 million profit on £4.58 billion of revenue during the fourth quarter.

Looking at its end-of-year figures, the service giant finished 2018 with a £1.28 billion profit on nearly £18.5 billion of revenue.

The company confirmed that demand for its completion services decreased in North America as expected during the fourth quarter — leading to lower pricing for hydraulic fracturing services. A dramatic drop in crude oil prices in the fourth quarter led to industry uncertainty and a decrease in exploration and production activity.

In a statement, Halliburton CEO Jeff Miller said the company was able to optimize their performance in North America while its international business offset the softer domestic market.

“As North American oil production reaches historic highs, operators focus on returns over growth, and the international recovery continues, Halliburton is well prepared to thrive,” Miller said in his statement. “We intend to dynamically respond to the changing market environment, reduce capital spending, develop differentiating technologies, and generate strong cash flow.”

More than 55 percent of the company’s revenue comes from North America. Halliburton reported that the region accounted for £2.5 billion of the company’s fourth quarter revenue, an 11 percent decrease from the third quarter. The company reported that the decrease was primarily driven by lower activity and pricing in stimulation services but was partially offset by higher fluids activity in the Gulf of Mexico.

Looking at the company’s worldwide figures, completion and production services accounted for £2.9 billion of the company’s revenue during in the fourth quarter — a decrease of £261 million from the third quarter. The decline was primarily driven by lower activity and pricing for stimulation services in North America but was partially offset by stimulation activity increases in Argentina and year-end completion tool sales internationally.

The fourth quarter and end-of-year figures beat Wall Street expectations. The average consensus of analysts was that Halliburton would finish the fourth quarter with nearly £4.55 billion of revenue and close the year with £18.5 billion of revenue.

Fourth quarter earnings per share beat Wall Street expectations of 36.8 cents as did end-of-year earnings per share, which were expected to be $1.58 for 2018.

This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more from the Houston Chronicle click here.