* Q1 EPS ex-items 61 cents vs Wall Street view 58 cents
* Q1 revenue $5.3 bln vs Street view $4.9 bln
* Takes $46 million charge for Libya
* Shares up 1.6 pct, have doubled since June 2010 low
* Larger rival Schlumberger down 2.5 pct
(Adds further analyst comment in paragraph 15, updates shares)
By Braden Reddall and Matt Daily
SAN FRANCISCO/NEW YORK, April 18 Halliburton
Co's (HAL.N) quarterly profit topped Wall Street forecasts as a
surge in the oilfield services company's North American
operations overshadowed the impact of a shutdown in Libya.
Halliburton's oil-producing customers are spending more on
new projects to take advantage of high oil prices, which surged
above $100 per barrel in late February and have remained strong
due to turmoil in the Middle East and North Africa.
Yet the unrest in Libya prompted the United Nations to
impose economic sanctions on the country, forcing energy
companies to pull out and leading to a $46 million charge for
That was anticipated by analysts, but a more than threefold
increase in profit from its North American business was not.
"North America was even better than we thought," said Roger
Read, an analyst with Morgan Keegan & Co. "International was
probably as bad or worse than they thought it would be."
Most energy watchers have said they expect oilfield service
markets to grow tighter in the second half of this year as work
on planned projects absorbs available capacity.
That view was confirmed by Halliburton, the second-largest
oilfield services company, which is more heavily exposed to
North America than sector leader Schlumberger Ltd (SLB.N).
"Going forward, I feel even more confident about the
prospects of our North America business in 2011 and beyond,"
Chief Executive Dave Lesar told a conference call. "We believe
there is upside for both revenue and margins as we respond to
the continued increases in service intensity."
A move toward increased U.S. oil extraction from shale,
which requires more equipment and expertise, favors Halliburton
due to its track record in U.S. natural gas shale production.
(For a graphic comparing Halliburton and Schlumberger, see
Halliburton said net profit rose to $511 million, or 56
cents per share, from $206 million, or 23 cents per share, a
Excluding the Libya charge, it made 61 cents per share,
topping analysts' average forecast of 58 cents, according to
Thomson Reuters I/B/E/S. Revenue rose to $5.3 billion, also
better than analysts' average forecast of $4.9 billion.
North American operating profit jumped to $732 million from
$230 million a year ago, and profit in Latin America rose 65
percent to $76 million. Profits fell in the rest of the world.
Lesar, the CEO since 2000, highlighted stiff competition
for contracts to explain weak profit margins in the Eastern
Hemisphere. But he sees this diminishing once rivals abandon
aggressive bidding for initial contracts in emerging fields.
In the past week, contracts for work off the coast of
Norway with Statoil (STL.OL) and for 15 wells in Iraq for Exxon
Mobil Corp (XOM.N) both went to Halliburton. [ID:nN11289441]
"Its price leadership in certain segments make it a strong
player regardless of disparate local market conditions," said
Phil Adams at Gimme Credit, who was encouraged by Halliburton's
talk of winning about a third of the new Gulf of Mexico work.
U.S. drilling permits have started being issued in the Gulf
of Mexico recently after an extended pause in response to the
Macondo well, on which Halliburton performed some work and
which suffered a disastrous blow-out a year ago on Wednesday.
Halliburton shares rose 1.6 percent to $47.59 in Monday
afternoon trading, double the level they plumbed last June due
to Macondo liability concerns. The Philadelphia Stock Exchange
Oil Service index .OSX was down 1.3 percent, and
Schlumberger, which has far more exposure to the Eastern
Hemisphere, fell 2.5 percent.
Schlumberger is set to post results on Thursday, along with
No.4 player Weatherford International WFT.VX. Industry No.3,
Baker Hughes Inc (BHI.N) ,is due to report on April 27.
(Editing by Maureen Bavdek, John Wallace and Tim Dobbyn)