Oilfield services provider, Halliburton Company (NYSE: HAL) said on Monday that it swung into fiscal first-quarter loss as it set aside a big onetime $637 million litigation charges, linked to the Deepwater Horizon disaster.
However, shares gained as non-GAAP/adjusted earnings edged-past Street’s consensus estimate while revenue also topped expectation.
The Houston Texas based Company, which is one of leading hydraulic fracturing services providers in the world, expects its margins to improve as the fiscal year progresses. Lately, the Company’s margins have been reeling under pressure due to increase in fracking costs in oil-rich basins and decline in demand for its services in oil rigs. (Hydraulic fracturing helps in extracting oil and gas from shale energy basins in the North America)
However, Halliburton’s Chairman and Chief Executive, Dave Lesar said that the company’s North American operations “began to benefit from lower cost guar, increased customer activity, internal cost efficiencies, and higher service intensity,” adding that margins will improve in coming months even as prices would increase modestly.
“We believe the worst of the pricing pressure is behind us,” said Chief Operating Officer Jeff Miller to analysts in earnings call.
For the quarter, Halliburton reported a loss of $18 million or 2 cents a share against a profit of $627 million or 68 cents a share, in the same quarter of last year. The recently concluded quarter included a charge of 68 cents a share linked to the Deepwater horizon litigation expenses.
Revenue during the quarter edged up 1.5% to $ 6.97 billion, thanks to 21% jump in international revenue which helped in offsetting 11% revenue fall in North America.
Stripping out onetime expenses such as amount kept for litigation charges, the Company posted a profit of 62 cents a share, beating analysts’ consensus estimate of earnings of 57 cents a share on revenue of $6.88 billion, according to a data compiled by Thomson Reuters.
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