Houston-based Halliburton reported Monday that total revenue for the second quarter of 2013 was a company record of $7.3 billion, compared with $7 billion for the first quarter of the year. Halliburton’s operating income climbed to $1 billion in the second quarter from $902 million in the first quarter of the year, adjusted for the Macondo litigation charge.
Halliburton’s second quarter2013 income from continuing operations was $677 million, or 73 cents per diluted share. For the first quarter, the company’s income from continuing operations was $624 million, or 67 cents or diluted share, which did not include a $637 million after-tax charge to increase a reserve related to the Macondo charge.
“I am pleased with our second quarter results, as total company revenue of $7.3 billion was a record quarter for Halliburton,” said Dave Lesar, chairman, president and chief executive officer, in a July 22 press release. “Relative to our primary competitors, we have delivered leading year-over-year international revenue growth for five consecutive quarters. Eastern Hemisphere operations grew revenue 11 percent sequentially, resulting from record revenues in both of our regions, and operating income was up 23 percent.
“Middle East/Asia, our fastest growing market, improved revenue 12 percent and operating income 17 percent sequentially. This across the board growth was led by higher stimulation, wireline, and fluids activity in Malaysia, and improved sales in China.”
An increase in drilling and completions activity in Angola, and a recovery in activity levels in Russia and the North Sea contributed to a growth in revenue of 9 percent in Europe/Africa/CIS, while operating income rose 33 percent.
Halliburton shrugged off sluggish Canadian activity levels and a rig count in the United States that was generally flat to record an increase of 3 percent sequentially in North America.
Lesar said Halliburton expects U.S. land rig count to be flat in the third quarter.
“We are observing a continuing trend towards multi-well pad activity among our customer base, which we believe will result in higher service intensity. Ultimately, we believe this efficiency trend bodes very well for us, as our scale and expertise allows us to lead the industry in executing factory-type operations. We also expect North American margins to continue to expand over the balance of the year.”
Halliburton revenue in Latin America for the second quarter of 2013 was flat with its disappointing first quarter following a lowered activity in the northern part of Mexico, increased mobilization costs and a drop in vessel activity, the company said. The company remained confident that there would be an improvement in revenue over the next two quarters of the year, and that margins in Latin America would average near 15 percent.
While noting that Halliburton’ second quarter earnings were only a modest improvement above expectations, an analyst at Barclays said in a July 22 report that the company’s performance is likely to have a positive effect on the company’s stock, which the analyst said was under-valued.
“In a sign of what we view as significant confidence in the company’s business outlook coupled with its (and our) view that the shares are significantly under-valued, Halliburton repurchased $1 billion worth of stock in 2Q (23 million shares at an average price of approximately $43.50) and announced a new $5 billion share buyback authorization.”