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On Monday, Halliburton (NYSE:HAL) reported a net income for the first quarter, compared to a net loss for the same period last year, as the oilfield service group’s revenue jumped on the back of a robust drilling market in North America so far this year.
Halliburton booked a net income of US$46 million, or US$0.05 per diluted share, for Q1 2018, compared to a loss from continuing operations of US$32 million, or US$0.04 per diluted share, for Q1 2017.
Revenues increased by 34 percent to US$5.7 billion, in line with analyst forecasts.
North America revenue soared 58 percent annually in Q1 to US$3.5 billion, driven by “increased activity throughout the United States land sector in the majority of Halliburton’s product service lines, primarily pressure pumping, as well as higher drilling and artificial lift activity,” said Halliburton.
Adjusted operating income came in at US$619 million, primarily driven by robust market conditions in North America, the group added, noting that the performance of the Completions and Production division was affected by “delays in sand delivery, due to weather related rail interruptions during the quarter, but achieved a strong March exit with margins in the mid-upper teens.”
“Overall, I am optimistic about Halliburton’s relative performance for the remainder of the year, and our ability to grow our North America margins and to maximize the value of our global footprint,” said President and CEO Jeff Miller, who noted that “Turning to the international markets, Halliburton has never been better positioned for a recovery than it is today.”
International revenue at Halliburton increased by 9 percent to US$2.2 billion, with Latin America the only area in which the company booked lower revenues year on year, due to declines across multiple product service lines in Venezuela and some decline in pressure pumping and project management activities in Mexico.
Referring to Venezuela, Halliburton wrote down all of its remaining investment in the country during Q1 2018, which resulted in a charge of US$312 million, net of tax. The write-down was a result of “recent changes in the foreign currency exchange system in Venezuela and continued devaluation of the local currency, combined with U.S. sanctions and ongoing political and economic challenges,” Halliburton said, adding that it is maintaining its presence in Venezuela and is “carefully managing its go-forward exposure.”
On Friday, Schlumberger (NYSE:SLB) reported Q1 results, with revenue and profits up from the same period in 2017, but warned that production challenges are emerging in U.S. shale linked to infill drilling well-to-well interference, the potential lower production of step-out drilling from Tier 1 acreage, and significant infrastructure constraints.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.