Halliburton Bruised Again by North American Operations

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Upstream services firm Halliburton (NYSE:HAL) (Houston, Texas) saw slim profits that came largely from overseas operations as a cyberattack and storm activity in North America created headwinds for the company.

Halliburton on Thursday reported total revenue over the three-month period ending September 30 of $5.7 billion, a 1.8% decline from the same period last year.

Energy companies have posted dismal earnings so far during the reporting season for the third quarter as weak demand and ample supplies take their toll. Halliburton peer SLB (NYSE:SLB) (Houston), formerly Schlumberger, said last month in its earnings release that operations in the U.S. market "remained subdued."

SLB reported net income for the three months ending September 30 of $9.2 billion, unchanged from the second quarter. Lower natural gas prices and weak refinery margins are creating headaches as sluggish growth from China, the world's second-largest economy behind the U.S., coupled with an economic slowdown in Western markets, are weighing down on the commodities market.

Even with a hurricane in the Gulf of Mexico, West Texas Intermediate, the U.S. benchmark for the price of oil, was trading lower before the start of trading Thursday to linger in the $71 per barrel range.

On storm activity, Halliburton said its North American operations were hurt by the impact on its service lines in the Gulf of Mexico from Hurricanes Francine and Helene. Pumping on U.S. land also declined.

North American revenue for the company was $2.4 billion for the third quarter, a 4% decline from the prior period. Jeff Miller, the head of Halliburton, said earnings per share were also impacted.

"We experienced a $0.02 per share impact to our adjusted earnings from lost or delayed revenue due to the August cybersecurity event and storms in the Gulf of Mexico," he said.

The Reuters news service was the first to report on the breach. The cyberattack primarily targeted the company's campus in Houston. In 2021, the ransomware group DarkSide targeted the Colonial fuel pipeline in the United States, prompting operator Colonial Pipeline to pay a $4.4 million ransom.

It was unclear if Halliburton paid ransom for the August incident.

Elsewhere, it was largely the Middle East and Asian markets that supported Halliburton during the third quarter, with regional revenue of $1.5 billion marking a 3% increase sequentially. Most of the support came from operations in Saudi Arabia and Kuwait.

Broader commodity markets are on edge following the results of the U.S. presidential election. Republican Donald Trump will be back in the White House with steep tariffs in mind, tariffs that would throttle growth in the world's largest economy.

Miller at Halliburton, however, was upbeat on his company's prospects.

"I see solid opportunities across business lines and geographies for Halliburton," he said.

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