Halliburton boosted its quarterly profit and revenue, but the oilfield services company says this year will be challenging. Fred Katayama reports.
Falling crude prices are pressuring drillers, but Halliburton managed to sharply boost its quarterly profit by cutting costs. The second largest oil field services company cut 1,000 workers last month and took a $129 million restructuring charge in the December quarter. Revenue also jumped, helped by strong production and drilling activity in the U.S. and the Middle East. That offset a production slowdown and currency weakness in Russia and Norway and lower drilling activity in Europe. But Halliburton CEO Dave Lesar said this year will be a challenging one. Crude oil prices have plummeted by more than 50 percent since June, and that has customers demanding that drillers cut their prices. Investors have punished the stocks of oil companies. Halliburton's shares are down 23 percent over 12 months. But they rose on these results. Cowen analyst James Crandell said, "The company's earnings release has modestly positive implications for the stock. Operating earnings overall were slightly above our estimate." Halliburton is buying Baker Hughes, which also beat earnings forecasts and expressed concern that results would be hurt this year. Baker Hughes' shares rose.