Halliburton Fourth-Quarter Net Grows as U.S. Hydraulic Fracturing Surges
Halliburton Co. (HAL), the world’s largest provider of hydraulic-fracturing services, expects its North America operating margins to decline further after falling in the fourth quarter as companies cut natural-gas drilling.
Halliburton, based in Houston, reported a profit margin of 27.2 percent for its largest region, down from 29 percent in the past two quarters, according to a statement today. The company expects another 1 percentage point decline in the regional margin this quarter as it moves eight hydraulic fracturing crews from gas basins to oil plays, Chief Financial Officer Mark McCollum told analysts today on a conference call.
“Cost inflation continues to have a negative impact,” Chief Executive Officer Dave Lesar said on the call. “There is a delay between vendor price increases and when we were able to pass through these increases to our customers. In the natural- gas basins, this is becoming more difficult.”
Halliburton helps companies drill for oil and gas, including using fracking, which blasts water mixed with sand and chemicals underground to free trapped hydrocarbons from shale formations. Increased use of fracking has boosted U.S. production, causing gas prices to hit a 10-year low and prompting companies including Chesapeake Energy Corp. and EQT Corp. to cut drilling operations.
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