* Expects 25 pct jump in second-quarter earnings
* First-quarter profit $0.73 vs est $0.71
* Revenue rises 5 pct to $7.35 billion
* Shares rise 5 pct to life-high
(Adds details from conference call, analyst comments, updates
By Swetha Gopinath
April 21 Halliburton Co, the world's
No.2 oilfield services provider, expects margins to improve in
North America after being depressed for two years as companies
step up spending to drill and complete wells.
Halliburton's shares rose as much as 5 percent to a life
high after the company forecast a 25 percent jump in earnings in
the current quarter, in line with market expectations.
"I am more excited about North America now than I have been
since late 2011," Halliburton Chief Executive Dave Lesar said on
a conference call with analysts on Monday.
"Supportive commodity prices today are translating into
stronger cash flow in operating budgets for our customers...,"
Rivals Schlumberger Ltd and Baker Hughes Inc
also spoke of improved markets in North America after posting
better-than-expected quarterly profits on Thursday.
Weak natural gas prices had dragged down drilling
activity in North America, intensifying competition among
oilfield services providers for a smaller number of contracts.
Halliburton, which also reported better-than-expected
results, said excess capacity in hydraulic fracking equipment
used in shale fields had tightened much faster than expected, at
least in Texas's Permian Basin.
"We don't think we'll have any problem filling our frac
calendar through the end of the year," Lesar said on the call.
The company said the tightening could also help it get
bigger jobs and pass on some increased prices to customers.
Halliburton said it expected further increases in earnings
beyond the second quarter due to the recovery in North America
and strong drilling activity in international markets.
"We believe that there is going to be a healthy recovery in
profitability levels for the services industry as activity
continues to grow in the shale world," said Sanford C. Bernstein
& Co analyst Scott Gruber.
Halliburton forecast a low-to-mid single digit improvement
in revenue in percentage terms in North America and said
margins would return to levels last seen in the second half of
The expected rise in drilling activity onshore United States
would more than offset a seasonal halt to drilling in Canada in
spring, Chief Financial Officer Mark McCollum said on the call.
Analysts said the forecast 25 percent growth in
second-quarter profit ending June would translate to 91 cents
per share, in line with the average estimate.
The company, traditionally dominant in the United States,
has been making a big push into international markets to combat
the weakness in North America in recent quarters.
Revenue and operating income increased 13 percent in the
Middle East and Asia region in the first quarter.
Revenue in Europe, Africa and the Commonwealth of
Independent States (CIS) rose 9 percent, while operating income
jumped 21 percent.
Revenue fell 9 percent in Latin America, while operating
income declined 8 percent due to reduced drilling activity in
Brazil and Mexico.
Revenue increased 5 percent, while operating income was flat
in North America. The company said operations in the region were
hurt by lower prices for pressure pumping services, higher
logistics costs and disruptions in drilling due to the harsh
Net income attributable to Halliburton was $622 million, or
73 cents per share, in the first quarter, compared with a loss
of $18 million, or 2 cents per share, a year earlier.
Analysts on average had expected earnings of 71 cents per
share, according to Thomson Reuters I/B/E/S.
The year earlier quarter included a pre-tax charge of $1
billion related to the Gulf of Mexico spill in 2010.
Halliburton was a contractor for BP Plc, owner of the
well that blew out causing the worst offshore oil spill in the
Revenue rose about 5 percent to $7.35 billion, beating
analysts' average estimate of $7.24 billion.
Halliburton's shares were up 3 percent at $62.81 in morning
trade. The stock gained 20 percent this year up to Thursday's
Baker Hughes shares were up 2 percent at $69.84, while
Schlumberger was up nearly 2 percent at $101.66.
(Aditional reporting by Kanika Sikka in Bangalore; Editing by