* Q2 earnings per share 73 cents vs 72 cents expected
* North American profit margins improve, seen rising more
* Shares fall 1.1 percent
By Braden Reddall
July 22 Halliburton Co on Monday
delivered a higher-than-expected quarterly profit as it found
greater success outside its natural gas-engorged home market in
the United States.
The world's second-largest oilfield services company also
said it boosted its share repurchase program by $4.3 billion
after buying $1 billion worth of its shares in the second
quarter and leaving only $700 million authorized from an
existing program set up in 2006.
Chief Executive Dave Lesar said the refreshed $5 billion
buyback reflected growing confidence in the outlook as he
predicted further profit margin improvement in North America.
Analysts at Tudor Pickering Holt said the buybacks would
grab as much attention as the results, though Halliburton shares
fell 1.1 percent to $45.32 on Monday after a strong run in
"We do not believe the market is yet fully appreciating its
solid and growing international footprint," Sterne Agee analyst
Stephen Gengaro wrote.
The Houston-based company reported a drop in second-quarter
profit to $679 million, or 73 cents per share, from $737
million, or 79 cents per share, a year ago. Analysts expected 72
cents per share, according to Thomson Reuters I/B/E/S. Revenue
rose 1 percent to $7.3 billion.
"Relative to our primary competitors, we have delivered
leading year-over-year international revenue growth for five
consecutive quarters," Lesar said in a statement.
On Friday, sector leader Schlumberger Ltd posted
higher-than-expected earnings on greater international exposure,
in stark contrast to U.S.-anchored Baker Hughes Inc.
A collapse in pricing for hydraulic fracturing services has
weighed on all players as natural gas drillers have cut back in
response to weak gas prices, but U.S. activity is showing signs
of recovery. Barclays has seen a 4 percent rise in drilling
permits in June in the 30 states it surveys, and the U.S.
gas-directed rig count is rising.
Analysts worried about a slump in the fourth quarter, when
exploration and production budgets start to empty out, though
Lesar believes higher oil prices should lead to "budget
reloading." He expected profit margin improvement to continue in
North America after a 1.2 percentage-point rise to 17.5 percent
over the second quarter.
The U.S. gas rig count fell to an 18-year low of 353 in
June, even as the count outside North America climbed to its
highest in 30 years, according to Baker Hughes data.
Halliburton highlighted more activity and sales in Malaysia,
China and Angola, while saying that Latin America should bounce
back after a disappointing first half.
Halliburton shares are up 23 percent in the last three
months, versus 18 percent for Schlumberger and 10 percent for
Baker Hughes. Halliburton got a big boost in April, when it
revealed talks to settle its liability related to the massive
2010 Gulf of Mexico spill.
The company said the talks slowed recently because BP Plc
, operator of the blown-out well, has been in a legal
battle over a separate settlement of claims with people and
businesses in the Gulf states.