Halliburton Sees Record Third-Quarter Earnings, Despite Decline in Latin American Activity

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Researched by Industrial Info Resources (Sugar Land, Texas)--Halliburton Corporation (NYSE:HAL) (Houston), a large supplier of products and services to the upstream oil & gas industry, announced in a webcast on October 21, 2013, that its third-quarter revenue reached $7.5 billion, up from $7 billion in third-quarter 2012. Chairman, President, and Chief Executive Officer Dave Lesar attributed the improvement to activity in the Latin America and Europe/Africa/CIS regions.

"I am pleased with our third-quarter results," Lesar said. "Total company revenue of $7.5 billion was a record quarter for Halliburton."

Industrial Info is tracking more than $8 billion in projects worldwide involving Halliburton, many of which are located in the profitable Eastern Hemisphere.

"Our international business continues to deliver strong growth," Lesar said. "On a year-to-date basis, our Eastern Hemisphere growth continues to lead our peer group. Compared to the third quarter of 2012, Eastern Hemisphere revenue and adjusted operating income grew 17% and 30%, respectively."

Russia, North Sea and Angola operations have increased in performance, leading to $1.3 billion in revenue for the segment. In the Middle East/Asia region, growing activity in Saudi Arabia has helped to offset the decline of activity seen in Australia and Malaysia, providing revenue of $1.2 billion. Lesar predicted the fourth-quarter outlook for 2013 to be the strongest quarter for the year.

Despite a decrease in activity in Mexico, consulting and software revenues grew in Latin America, offsetting the effects of companies ramping-down in anticipation of the upcoming mega-tender projects in Mexico. Lesar remained positive that Latin American business will pick up, as Brazil is the largest deepwater market in the world. Third-quarter earnings were $1 billion for the region, the lowest of the segments.

In North America, floods in Colorado affected efficiency and cost structure, and land rig counts in the U.S. remain sluggish; however, the forecast for Gulf of Mexico activity in 2014 is positive, as Halliburton will roll out its "Battle Red" and "Frac of the Future" initiatives. Revenue in the North American segment hit $3.8 billion.

Completion & Production revenue was $4.5 billion in the third quarter, driven by the recovery from spring break-up in Canada and international activity. Drilling & Evaluation reported third-quarter revenue of $3 billion, primarily from higher drilling activity in North America and Latin America.

Halliburton was awarded a contract for cavity conversion for the $450 million Middlewich Grassroot Natural Gas Storage Caverns project in London, England. The project consists of the construction of a compressor station and the leaching of 10 caverns to store 100 million cubic meters of natural gas. The project is set for completion in August 2015.

"Globally, we will continue to expand our portfolio in deepwater, mature fields, and unconventionals," Lesar said. "We believe the underlying fundamentals for our industry are strong, and I am optimistic about Halliburton's relative performance as we move into 2014."

For more information, visit Industrial Info's Oil & Gas Production Database.

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