Halliburton (HAL) second-quarter results beat expectations Wednesday, as the oilfield service provider expects U.S. rig counts to rise in the second half of the year and the Energy Department said U.S. crude stockpiles fell last week.
Halliburton in Q2 swung to a loss of 14 cents per share from 44 cents a year ago. Analysts were expecting a 19-cent loss. Revenue fell 35.1% to $3.84 billion, above views for $3.75 billion.
Halliburton shares fell 1.6% to 44.28 at the close on the stock market today. Halliburton is in a long consolidation with a buy point of 46.79.
"Our activity outlook has not changed and our strategy is working," Chief Executive Dave Lesar said in the earnings release. "During the coming recovery, we plan to scale up our integrated delivery platform by addressing our product line building blocks one at a time through a combination of organic growth and selective acquisitions."
North America revenue fell 15% sequentially, outperforming the U.S. rig count, according to the company. Rig counts hit a bottom during the second quarter and are now on the uptick, rising last week to 447. That marks the third straight rise and the sixth gain out of the last seven weeks.
Lesar said the company believes "the North America market has turned" and expects an uptick in rig counts for the back half of the year.
The Energy Information Administration said U.S. stockpiles fell by 2.34 million barrels in the week ended July 15. On Tuesday the American Petroleum Institute, an industry group, said oil stocks fell by 2.3 million barrels. Reuters analysts were expecting a 2.1 million barrel decline.
U.S. production rose by 0.1% to 8.49 million barrels, a third straight week of increases.
August crude futures rose 0.7% to $44.94 a barrel. September crude, which is becoming the active contract, rose 0.7% to 45.75.
IBD'S TAKE: Shares of Halliburton and Schlumberger are near buy points as oil prices climb and drilling resumes. The oilfield service providers could join giants like Chevron and Royal Dutch Shell in buy territory.
Revenue from Latin America fell 12% sequentially as rig count in Brazil and Mexico hit 20-year lows and political unrest hurt operations in Venezuela. Middle East/Asia revenue fell 3% sequentially on as activity fell in Iraq, Australia and Indonesia.
Larger rival Schlumberger (SLB), which announces results Thursday, is expected to report a 75% drop in earnings to 22 cents a share and a 21% decline in revenue to $7.12 billion. Schlumberger stock rose 1% to 80.60.
Baker Hughes (BHI) reports July 28. Baker Hughes shares ticked down 3 cents to 45.71 at the close.
