Halliburton announced that income from continuing operations for the third quarter of 2013 was $745 million, excluding restructuring charges of $38 million, after-tax.
This compares to income from continuing operations for the second quarter of 2013 of $677 million, excluding a $35 million charge, after- tax, related to a charitable contribution to the National Fish and Wildlife Foundation. Reported income from continuing operations for the third quarter of 2013 was $707 million. Reported income from continuing operations for the second quarter of 2013 was $642 million.
Halliburton’s total revenue in the third quarter of 2013 was $7.5 billion, compared to $7.3 billion in the second quarter of 2013. Operating income was $1.1 billion in the third quarter of 2013, compared to operating income of $1.0 billion in the second quarter of 2013. The Latin America and Europe/Africa/CIS regions were the primary drivers of this sequential improvement.
During the third quarter Halliburton made adjustments to headcount and other assets based on the progress of strategic Battle Red and Frac of the Future initiatives. These adjustments resulted in severance charges and asset write- offs of approximately $38 million, after-tax, or $0.04 per diluted share.
Also during the third quarter, Halliburton repurchased approximately 68 million shares of its common stock at an aggregate cost of $3.3 billion pursuant to a modified Dutch auction cash tender offer.
“I am pleased with our third quarter results; total company revenue of $7.5 billion was a record quarter for Halliburton,” commented Dave Lesar, chairman, president and chief executive officer.
“Both our Drilling & Evaluation and Completion & Production divisions set quarterly revenue records, with our Baroid, Completion Tools, Drill Bits and Testing product lines setting quarterly operating income records.
“Our international business continues to deliver strong growth. On a year-to-date basis, our Eastern Hemisphere growth continues to lead our peer group. Compared to the third quarter of 2012, Eastern Hemisphere revenue and adjusted operating income grew 17% and 30%, respectively.
“Eastern Hemisphere growth was led by record quarterly revenue in our Europe/Africa/CIS region, where adjusted operating income improved 29% sequentially, due to improved performance in our Russia, North Sea and Angola operations.
“In the Middle East / Asia region, reduced activity in Australia and Malaysia, as well as lower profitability in Iraq, was partially offset by higher activity in Saudi Arabia.
“Consistent with prior years, we expect the fourth quarter in the Eastern Hemisphere to be our strongest quarter of the year, due to seasonal year-end software and equipment sales, with margins in the high teens.
“In Latin America, revenues increased 6% sequentially and adjusted operating income increased by 57%, as a result of higher consulting and software revenues in Mexico, along with higher utilization of our stimulation vessels relative to the first half of the year. We anticipate that fourth quarter revenues and margins for Latin America will be impacted by curtailed activity in Mexico. However, we maintain our positive outlook for the region, and we expect Mexico will be a strong contributor to increasing revenue and profitability going forward.
“Despite severe revenue and operational disruptions from the Colorado floods, our North America business delivered 2% sequential revenue growth, and adjusted operating income grew 4%, following the seasonal recovery in Canada and increased activity in the Gulf of Mexico deepwater market.
“During the quarter, we saw improvement in activity levels across the United States land market as drilling and completion efficiencies continue to drive an improved well count. The United States land rig count, however, remains sluggish. Additionally, oversupply of service capacity in North America continues to put pressure on pricing in a number of areas.
“However, we expect to see margin improvement during 2014 as Gulf of Mexico activity expands, we deploy our Battle Red and Frac of the Future initiatives, and we continue to see revenue gains as unconventional service intensity improves.
“Globally, we will continue to expand our portfolio in deepwater, mature fields, and unconventionals. We believe the underlying fundamentals for our industry are strong, and I am optimistic about Halliburton’s relative performance as we move into 2014,” concluded Lesar.
LNG World News Staff, October 22, 2013; Image: Halliburton