Halliburton announced that income from continuing operations for the third quarter of 2012 was $625 million, excluding a $30 million after-tax acquisition-related charge and a $13 million after-tax gain from the settlement of a patent infringement case.
Reported income from continuing operations for the third quarter of 2012 was $608 million. This compares to income from continuing operations for the second quarter of 2012 of $745 million.
Halliburton’s consolidated revenue in the third quarter of 2012 was $7.1 billion, compared to $7.2 billion in the second quarter of 2012. Consolidated operating income was $954 million in the third quarter of 2012, compared to $1.2 billion in the second quarter of 2012. Lower activity and higher costs in the United States land market drove these declines.
“I am pleased with the strengthening of our market position in key international geographies and in product lines where we envision strong growth in the coming years,” commented Dave Lesar, chairman, president and chief executive officer.
“We believe our international strategy is playing out as planned, as evidenced by our third quarter record revenue for both the Latin America and the Middle East/Asia regions. From a global perspective, our Drilling & Evaluation division posted record revenue for the quarter. We also achieved third quarter record revenue in four of our product service lines – Boots & Coots, Wireline and Perforating, Consulting and Project Management, and Baroid, which also had a record quarter for operating income.
“Consolidated third quarter revenue of $7.1 billion was down 2% sequentially, driven by a 5% reduction in our North America revenue. On an adjusted basis, total operating income of $982 million decreased 18% sequentially, primarily due to pricing pressure and guar cost issues in our North America Production Enhancement business.
“International revenue was up 2% from the second quarter, compared to a 2% rig count decline, as a result of solid sequential growth in our Latin America and Middle East/Asia regions. Adjusted international operating income was up 5% sequentially due to strong activity improvements in key geographies such as Mexico, Brazil, Russia, Malaysia, and Australia.
“In Latin America, revenue was up 8% sequentially, despite a 5% drop in the rig count. Adjusted operating income increased 12% sequentially, led by excellent performance in Mexico and Brazil. We saw a significant increase in unconventional activity across Latin America during the quarter, and we expect margins to improve in the fourth quarter, aided by end of year software sales.
“In the Eastern Hemisphere, revenue has grown 19% and adjusted operating income has grown almost 70% compared to the third quarter of last year, relative to rig countgrowth of 5%, after normalizing for the recent addition of Iraq. We continue to see steady margin improvement and are optimistic about activity levels expanding in the fourth quarter and in the coming year.
“Middle East/Asia posted higher sequential revenue and operating income of 3% and 9%, respectively, while the rig count contracted 3%. These increases were driven by strong activity improvements this quarter in Malaysia and Australia and improved profitability in Iraq.
“In Europe/Africa/CIS, we saw a slight decline in revenue and operating income in the third quarter, largely resulting from activity delays in the North Sea, shutdowns related to general elections in Angola, and reduced activity in Algeria and across continental Europe. Relative to the third quarter of 2011, revenue grew 14% and adjusted operating income grew 66% as we focused on repairing underperforming markets.
“Overall, our outlook for the international market has not changed, and we expect a gradual progression in margins as we ramp up activity on recent wins and new projects, introduce new technologies, increase pricing on select contracts, and continue to improve results in those markets where we have made strategic investments.
“In North America, revenue was down 5% and operating income was down, driven mainly by pricing pressure in hydraulic fracturing, guar cost inflation, and activity disruptions due to Hurricane Isaac. We are also seeing activity reductions by some of our customers as they continue to moderate activity to operate within their stated 2012 budgets.
“The average U.S. land rig count declined 68 rigs, or approximately 4%, sequentially. Although the oil-directed rig count grew by 44 rigs, or 3%, this was not sufficient to offset the 18% drop in natural gas rigs. While the Canadian rig count increased 84% sequentially coming out of spring break-up, the increase was well below normal, averaging only 325 rigs in the third quarter. Relative to the third quarter of 2011, the U.S. rig count is down 38 rigs, or 2%, and Canada is down a disappointing 116 rigs, or 26%.”
“We continue to be confident in the long-term fundamentals of our business, and our growth strategy going forward remains unchanged. We will continue to focus on maintaining our leadership position in North America, strengthening our international margins, and continuing to grow our market share in deepwater, global unconventionals, and underserved international markets,” concluded Lesar.
LNG World News Staff, October 24, 2012