Halliburton Co. (NYSE: HAL) warned on March 24 that its first-quarter profit would likely miss analysts' expectations due to higher costs and weak demand in markets outside North America.
Shares of the company, which forecast higher revenue from its U.S. land operations, were up about 1% in early trading on the New York Stock Exchange.
The company expects its earnings per share to be in low-single digits in the quarter ending March, CEO David Lesar said on a conference call on March 24.
Analysts on average expect earnings of 13 cents per share, according to Thomson Reuters.
The rise in costs is essential because of the company's move to reactivate more equipment and expand its headcount, in response to increased activity in shale fields across the U.S.
"By doubling this rate of activation and accelerating it to the front half of the year, we are in effect front loading much of the hit to income at the beginning of the year," Lesar said.
Halliburton said it planned to hire more than 2,000 field employees in its U.S. land operations by the end of the quarter. The company also said it was being impacted by higher costs for sand—used to keep wells open after fracking.
U.S. shale producers have rapidly ramped up drilling over the past six months, encouraged by a near 50% rise in oil prices since February 2016, when they hit 13-year lows.
Halliburton, the world's second-largest oilfield services provider, said it expected its first-quarter revenue from its U.S. land operation to surge by 25% from the fourth quarter.
Activity in international markets, in contrast, remains sluggish, and an "inflection" is unlikely until later in the year, Lesar said.
Recommended Reading
Keeping it Simple: Antero Stays on Profitable Course in 1Q
2024-04-26 - Bucking trend, Antero Resources posted a slight increase in natural gas production as other companies curtailed production.
NOV Announces $1B Repurchase Program, Ups Dividend
2024-04-26 - NOV expects to increase its quarterly cash dividend on its common stock by 50% to $0.075 per share from $0.05 per share.
Initiative Equity Partners Acquires Equity in Renewable Firm ArtIn Energy
2024-04-26 - Initiative Equity Partners is taking steps to accelerate deployment of renewable energy globally, including in North America.
Repsol to Drop Marcellus Rig in June
2024-04-26 - Spain’s Repsol plans to drop its Marcellus Shale rig in June and reduce capex in the play due to the current U.S. gas price environment, CEO Josu Jon Imaz told analysts during a quarterly webcast.
Ithaca Deal ‘Ticks All the Boxes,’ Eni’s CFO Says
2024-04-26 - Eni’s deal to acquire Ithaca Energy marks a “strategic move to significantly strengthen its presence” on the U.K. Continental Shelf and “ticks all of the boxes” for the Italian energy company.