Forecasting the impact of 2-3 cents per share on trade tensions
The company says customers who evaluate their activities
International revenues will remain flat to slightly decline for the year
(Update details of severance expenses in paragraph 7, share prices in paragraphs 1 and 4)
By Arunima Kumar and Arathy Somasekhar
HOUSTON, April 22 (Reuters) – Haliburton warned on Tuesday that tariffs and reduced oilfield activity in North America had a second-quarter revenue impact on North America and lowered oil field activity, sending oilfield service producers’ shares down about 6% as producers assess drilling and completions at weak oil prices.
Halliburton is the first of the three major oilfield service providers in the United States and the first major oil company to report earnings as U.S. crude prices hover below $64 a barrel. Many companies say they will not be able to drill for profit if oil prices fall $65 a barrel, which weakens demand for equipment and services provided by companies such as Halliburton.
“Many of our customers are evaluating their event plans, and a reduction in the planned 2025 event could mean higher space for the faithful fleet than normal, in some cases, the fleet retires or exports to international markets,” said Jeff Miller, CEO of Halliburton, of North American markets. “White space refers to the gap in the calendar when the company is not preparing for the equipment.
Halliburton shares fell about 6% to $20.62 per share after forecasting the 2-3 cent impact from trade tensions in the second quarter. According to LSEG data, second-quarter revenue is estimated to be 63 cents per share.
During the meeting, the stock fell 10% and has fallen 24% so far. This year, the share price of rival SLB fell just 11%.
Oilfield Services is concerned that President Donald Trump’s tariffs on imported steel will damage supply chains and increase equipment costs such as rigs and derricks.
The company also spent $107 million in severance payments in the first quarter. Halliburton also accepted $63 million in severance payments in the third quarter of 2024, and he did not immediately respond to a request for details about severance payments.
Halliburton said North American revenue was $2.2 billion in the first quarter, down 12% from the same period last year.
International operations help mitigate the impact of slow demand in North America, which is the leader in the Middle East and Asia’s growth of 6% year-on-year. It predicts that international revenues will remain flat to a slight decline.
Halliburton predicts revenue in its completion and production sectors increased by 1% to 3% over the first quarter, with a margin of about flat. Drilling and Assessment sector revenue is expected to remain flat to 2%. Profit margin setting dropped by 125 to 175 basis points. The Houston-based company had profits of $204 million or 24 cents a share in the three months ended March 31, down from $606 million, or 68 cents a share.
The company does not include $356 million in pre-tax expenses, which include severance payments, which earns 60 cents and coexists with analyst estimates.
The $5.42 billion revenue beat analysts’ average estimate of $5.28 billion. (Reported by Arathy Somasekhar of Houston, Editors by Sriraj Kalluvila, Franklin Paul and David Gregorio)
