HALLIBURTON, THE world’s largest provider of hydraulic fracturing services, reported a decline in its fourth-quarter operating margin in North America as companies cut natural-gas drilling.
Halliburton, based in Houston, reported a profit margin of 27.2 per cent for the region, its largest, down from 29 per cent in the past two quarters, according to a statement today.
Halliburton fell 3.3 per cent to $35 at 9.31am in New York.
“We believe strongly that we will not experience a collapse of margins in North America,” chief executive Dave Lesar said in the statement.
Gas prices at a 10-year low have prompted companies including Chesapeake Energy and EQT to cut drilling operations.
Halliburton expects to increase revenue and operating income in North America by the end of 2012, Mr Lesar said.
Margins for the company’s eastern hemisphere business are expected to be in the “mid to high teens” at the end of this year, he said.
Net income rose 50 per cent to $906 million, or 98 US cent a share, from $605 million, or 66 cent, a year earlier, according to the statement.
Excluding a $15 million charge related to an unspecified environmental matter, the company marginally beat forecasts.
Sales climbed 37 per cent to $7.1 billion.
Halliburton is the US market leader in pressure pumping, which is used in the hydraulic fracturing process which blasts water mixed with sand and chemicals underground to oil and gas from shale formations.
Halliburton’s North American margin drop was “a slight pullback,” Brian Youngberg, an analyst at Edward Jones in St Louis, who rates the shares a “hold” and owns none, said in a telephone interview.
Halliburton widened its lead last year as the largest fracking-service company by boosting the amount of its pumping equipment 37 per cent to 2.6 million horsepower in North America, according to Tulsa, Oklahoma-based Spears and Associates.
Last Friday, larger rival Schlumberger reported a higher-than-expected quarterly profit, but gave an uncertain view of how this year will pan out. – Bloomberg/Reuters
