Halliburton Hits Record Revenues in Second-Quarter 2014, Ups Capex to $3.3 Billion for Full Year

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Researched by Industrial Info Resources (Sugar Land, Texas)--Halliburton Corporation (NYSE:HAL) (Houston), a major supplier of products and services to the upstream oil & gas industry, reported solid profits and record quarterly revenue in second-quarter 2014, led by solid productivity improvements in North America and the Eastern Hemisphere; in particular, growth in U.S. operating income outpaced growth in the U.S. land rig count. Net income was reported to be $774 million, a 20.19% increase from second-quarter 2013.

Industrial Info is tracking more than $6.6 billion in active projects involving Halliburton, including the Tamar-1 and Tamar-2 offshore drilling programs, each valued at $350 million, in the Mediterranean Sea near Haifa, Israel. The second phase of each project involves drilling seven wells to reach total projected output of 1.2 billion cubic feet by 2015. Delek Group Limited (Netanya, Israel) is the owner and project manager, and Halliburton KBR (Leatherhead, England) is serving as a contractor.

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Total revenues stood at a record $8.05 billion, a 10.03% increase from the same period last year. The Completion & Production segment benefited from an increase in U.S. stimulation activity and seasonal recoveries in the North Sea and Russia, as well as project growth in Sub-Saharan Africa. The Drilling & Evaluation (D&E) segment benefited from higher demand for wireline and fluid services in the U.S. and the Eastern Hemisphere, which offset a seasonal Canadian slowdown following the spring break-up. The D&E segment also reported setbacks in Mexico, where the land rig count was near historic lows and mobilization costs were high.

During the second quarter, Halliburton made two major acquisitions: Neftex Petroleum Consultants Limited (Oxfordshire, England), a consulting firm that focuses on subsurface risk reduction, and Europump Systems Incorporated (Lloydminster, Alberta), a company that designs and distributes progressive cavity pump systems and wellhead drives, as well as surface drive units.

Capital expenditures for the first half of 2014 were reported to be $1.38 billion, compared with $1.4 billion in the same period last year.

"In the Eastern Hemisphere, revenues and operating income increased sequentially by 9% and 26%, respectively, as a result of a growth in both the Middle East/Asia and Europe/Africa/CIS regions," said Mark McCollum, the chief financial officer for Halliburton, in a conference call. "We experienced a seasonal rebound in revenues and margins after encountering typical, weather-related first-quarter weakness in the North Sea, Russia and Australia."

He added: "Saudi Arabia showed strong sequential improvement, driven by our consulting, directional-drilling, and drilling fluids product lines. We're very excited about this market, and continue to see revenue and profitability improving at a very aggressive rate."

Revenues are expected to see their strongest gains in the fourth quarter, which typically is the company's strongest. Growth in the Eastern Hemisphere is expected to remain strong, with the Middle East/Asia region boasting the highest growth rate, despite potential disruptions in Iraq. The second quarter's problems in Mexico are expected to turn around, and Halliburton executives expect to accelerate the company's North American hydrofracturing capabilities following a growth in U.S. demand.

"We intend to accelerate our build schedule and expand our logistics infrastructure," McCollum said. "As a result, we now expect that our 2014 capital expenditures will be approximately $3.3 billion, an increase of $300 million compared with our previous guidance."

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.