Halliburton plans to reduce capital spending in fourth-quarter report
HOUSTON -- Halliburton Company has reported income from continuing operations of $664 million, or $0.76 per diluted share, for fourth-quarter 2018. This compares to income from continuing operations for the third quarter of 2018 of $435 million, or $0.50 per diluted share. Adjusted income from continuing operations for the fourth quarter of 2018, excluding a tax benefit related to a strategic change in the company’s corporate structure, was $358 million, or $0.41 per diluted share.
Halliburton's total revenue in the fourth-quarter 2018 was $5.9 billion, a 4% decrease from revenue of $6.2 billion in the third quarter of 2018. Operating income was $608 million during the fourth quarter of 2018, a 15% decrease compared to operating income of $716 million in the third-quarter 2018.
Total revenue for the full year of 2018 was $24.0 billion, an increase of $3.4 billion, or 16%, from 2017. Reported operating income for 2018 was $2.5 billion, compared to a reported operating income of $1.4 billion for 2017. Excluding special items, adjusted operating income for 2018 was $2.7 billion, a 35% improvement from adjusted operating income of $2.0 billion for 2017.
“I am pleased with our overall financial results for the year and for the fourth quarter. Our team optimized our performance in North America as the market softened, and the recovery of our international business continued,” commented Jeff Miller, Chairman, president and CEO.
“The trajectory of this cycle has been far from smooth. As expected, in North America, the demand for completion services decreased during the fourth quarter, leading to lower pricing for hydraulic fracturing services.
“Our international business continues to show signs of a steady recovery, with revenue increasing 7% sequentially, underscoring the versatility and global reach of our business portfolio.
“As North American oil production reaches historic highs, operators focus on returns over growth, and the international recovery continues, Halliburton is well prepared to thrive. We intend to dynamically respond to the changing market environment, reduce capital spending, develop differentiating technologies, and generate strong cash flow.
“Halliburton celebrates 100 years of service in 2019. As we enter our next century, we will remain focused on collaborating with our customers and engineering solutions to maximize their asset value, and on delivering strong cash flow and industry-leading returns for our shareholders,” concluded Miller.
Operating segments
Completion and production
Completion and Production revenue in the fourth quarter of 2018 was $3.8 billion, a decrease of $338 million, or 8%, when compared to the third quarter of 2018, while operating income was $496 million, a sequential decrease of $117 million, or 19%. These declines were primarily driven by lower activity and pricing for stimulation services in North America, partially offset by stimulation activity increases in Argentina and year-end completion tool sales internationally.
Drilling and evaluation
Drilling and Evaluation revenue in the fourth quarter of 2018 was $2.1 billion, an increase of $102 million, or 5%, when compared to the third quarter of 2018, while operating income was $185 million, a sequential increase of $4 million, or 2%. These increases were primarily due to year-end software sales, increased fluids activity in the Gulf of Mexico, and improved project management activity in Latin America. These improvements were partially offset by reduced drilling activity in the Western Hemisphere.
Geographic regions
North America
North America revenue in the fourth quarter of 2018 was $3.3 billion, an 11% decrease sequentially. This decrease was primarily driven by lower activity and pricing in stimulation services, partially offset by higher fluids activity in the Gulf of Mexico.
International
International revenue in the fourth quarter of 2018 was $2.6 billion, a 7% increase sequentially, resulting primarily from increased year-end product and software sales in Middle East/Asia and Latin America, partially offset by a seasonal decline in pipeline
services in Europe/Africa/CIS.
Latin America revenue in the fourth quarter of 2018 was $607 million, a 16% increase sequentially, resulting primarily from year-end software and completion tool sales and higher stimulation activity across the region, coupled with improved activity across multiple product service lines in Mexico.
Europe/Africa/CIS revenue in the fourth quarter of 2018 was $746 million, relatively flat sequentially, primarily driven by a seasonal decline in pipeline services across the region, coupled with decreased activity across multiple product service lines in the North Sea.
These results were partially offset by year-end completion tool sales in Ghana and Nigeria. Middle East/Asia revenue in the fourth quarter of 2018 was $1.2 billion, an 8% increase sequentially, largely resulting from year-end completion tool sales in the Middle East, coupled with higher project management activity throughout the region.
For more information, please visit Halliburton's website.
