Halliburton Reports $3.2B Loss in 2Q

US oil services giant Halliburton reported a $3.2bn loss in 2Q 2016 from its continuing operations on July 20, one-third as much again than its $2.4bn loss in the preceding 1Q quarter.

Revenues in April-June were correspondingly 9% lower at $3.84bn – of which $1.5bn in North America, down 15%, and $2.3bn elsewhere, down 4% – and its operating loss was 26% greater at $3.88bn largely as a result of the May 1 cancellation of a planned merger.

“Our 2Q results showed resilience in the face of another challenging quarter marked by lower activity levels and continued pricing pressure around the globe,” said Dave Lesar, Chairman and CEO.

Halliburton’s termination fee paid to Baker Hughes, after the US Justice Department issued a negative decision on anti-trust grounds, together with related costs, came to $3.52bn in 2Q 2016 and $583mn in 1Q 2016. If those costs are excluded, Halliburton’s adjusted operating income was $62mn in 2Q, compared with $225mn in 1Q 2016.

Halliburton, in the red (Photo credit: Halliburton/LinkedIn)

Revenues for 1H 2016 were $8bn (down from $13bn in the year-ago period), of which $3.6bn came from drilling and evaluation ($5.3bn), and $4.4bn from completion and production ($7.7bn). Net loss for 1H 2016 was just over $5.6bn, compared with $589mn in January-June 2015.

Rival giant Schlumberger's earnings are due July 22, followed by Italy's Saipem on July 27, Baker Hughes and Technip on July 28, and Amec Foster Wheeler’s on August 9. AmecFW is the result of a recent merger, while Technip is partway through its announced merger with US contractor FMC.

Most contractors are expected to report significantly losses or lower 1H 2016 earnings as a result of the fall in oil prices, reduced investor confidence, the deferral of billions of major oil, gas and LNG developments, and the costs of redundancies – although Norway’s Aker group hinted on July 19 there might be light at the end of the tunnel.

Mark Smedley