Most of the leading oil companies are now focusing on improving
their shareholder returns rather than overspending on production and expansion
activities. This approach is likely to hurt service providers like Halliburton
due to lower demand.
The company has also been seeing weakness in North America,
which is its main region and this is likely to have a negative effect on its quarterly
results. However, Halliburton’s international operations continue to be strong
and this momentum is likely to continue in the second quarter as well.
In the first quarter of 2019, Halliburton topped market estimates on revenue while earnings matched expectations. Total revenue remained flat at $5.7 billion while adjusted EPS fell 44% to $0.23.
Revenues declined in the Completion and Production segment
while the Drilling and Evaluation segment posted single-digit revenue growth. Revenues
in the North America region fell 7%, mainly due to lower prices for stimulation
services, but revenues across all the international regions saw increases.
Halliburton’s shares have dropped 52% in the trailing 52 weeks and over 19% year to date. The stock was down 2% in mid-day trade on Thursday.