Halliburton Announces Second Quarter Earnings of $0.30 Per Share Excluding Employee Separation Costs.Reported Net Income of $0.29 Per Diluted Share
HOUSTON -- Halliburton (NYSE NYSE
See: New York Stock Exchange :HAL Hal: see Halle, Belgium.
In Sufism, a state of mind reached from time to time by mystics during their journey toward God. The ahwal (plural of hal) are God-given graces that appear when a soul is purified of its attachments to the material world. ) announced today that net income for the second quarter of 2009 was $274 million, or $0.30 per diluted share excluding employee separation costs of $12 million, after tax, or $0.01 per diluted share. Reported net income for the second quarter of 2009 was $262 million, or $0.29 per diluted share. This compares to net income for the second quarter of 2008 of $504 million, or $0.55 per diluted share. The second quarter of 2009 results were negatively impacted by the steep continued downturn in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. drilling activity. The second quarter of 2008 results were negatively impacted by a $30 million charge related to a patent settlement partially offset by a $25 million gain related to the sale of two investments in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. .
Halliburton's consolidated revenue in the second quarter of 2009 was $3.5 billion, compared to $3.9 billion in the first quarter of 2009. Revenue for most product service lines fell, with the exception of completion tools and software and asset solutions, primarily based on a reduction in North America rig count leading to lower pricing and demand for products and services. Consolidated operating income Operating Income
The profit realized from a business' own operations.
This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. was $476 million in the second quarter of 2009 compared to $616 million in the first quarter of 2009.
"Weak global demand and volatility in the commodity markets continue to weigh on weigh on
to be oppressive or burdensome to: the expectations that weigh so heavily on diplomats' wives
Verb 1. the oilfield services industry. The worldwide average rig count decreased 25% sequentially, further weakening industry fundamentals during the second quarter," said Dave Lesar, chairman, president and chief executive officer.
"North America continued to experience steep declines in drilling activity leading to increased overcapacity o·ver·ca·pac·i·ty
Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. . North America average rig count declined in the second quarter by 39%. Activity in the United States has progressively shifted to unconventional plays, where horizontal drilling now accounts for 43% of the current rig count. This shift increases the demand for complex solutions, creating the opportunity for a packaged-services commercial approach helping to partially mitigate pricing erosion and protect market share.
"Due to the continued weakness in natural gas demand, reflected in the high injection rates for working gas storage, we believe it is unlikely that there will be a meaningful recovery in natural gas prices and, consequently, drilling activity for the remainder of the year.
"The downturn in international markets has not been as pronounced due to the strengthening commodity prices, deflationary de·fla·tion
1. The act of deflating or the condition of being deflated.
2. A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available cost environment, and stabilizing financial markets which are improving our customers' overall project economics. The strength of international markets will ultimately be dependent on the health of commodity pricing, financial markets, and robustness of global demand.
"Operating margins Operating Margin
A ratio used to measure a company's pricing strategy and operating efficiency.
Calculated by: outside of North America remained at 20%. We rationalized our costs to offset pricing pressures; however, customers have continued to focus on aggressively lowering their project costs.
"We believe that the long-term economic fundamentals of our industry are bright. While we have taken prudent steps to control costs and improve financial flexibility, we continue to execute our strategy of maintaining disciplined investments in technology, capital equipment, and global infrastructure to ensure that we are well positioned at the other side of this cycle. The successful execution of this strategy has been validated by approximately $3.5 billion of recent contract awards.
"Although the depth and duration of the cycle remains uncertain, we believe the market will benefit companies with broad, integrated offerings, and a strong capital structure such as ours, allowing them to customize solutions across global markets," concluded Lesar.
2009 Second Quarter Results
Completion and Production (C&P) operating income in the second quarter of 2009 was $243 million compared to $363 million in the first quarter of 2009. North America C&P operating income decreased $114 million, primarily due to the decline in US land activity, volume reductions, and pricing declines across all product service lines in the United States. Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. C&P operating income was flat as increased activity in Brazil and Mexico offset declines in Argentina and Colombia. Europe/Africa/CIS C&P operating income decreased $8 million as higher activity in Norway and Russia was outweighed by declines in Africa and the United Kingdom. Middle East/Asia C&P operating income increased due to a better mix of completion tools sales and increased activity in Australasia and the Northern Gulf.
Drilling and Evaluation (D&E) operating income in the second quarter of 2009 was $284 million compared to $304 million in the first quarter of 2009. North America D&E operating income declined by $36 million due to lower volumes and pricing declines across all product service lines except software and asset solutions. Latin America D&E operating income was flat as higher activity in Mexico offset sequential reductions in Colombia. Europe/Africa/CIS D&E operating income decreased as declines in Egypt and Angola offset higher activity in Russia and Norway. Middle East/Asia D&E operating income increased $22 million with higher activity in Asia outweighing activity declines in certain countries in the Middle East.
Significant Recent Events and Achievements
* Halliburton won a five-year, $1.5 billion contract with an Integrated Oil Company for its work throughout North America. The contract covers services that range from well construction to completion and production.
* Halliburton has been awarded over $1 billion in new contracts globally for the provision of engineered fluid solutions including $700 million for deepwater projects in Brazil, Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico
Golfo de Mexico
Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , Indonesia, Angola and other countries and $300 million for shelf- and land-related work.
* Halliburton has been awarded a two-year contract by StatoilHydro to provide fluids systems for multiple fields, currently including cementing services for 20 rigs and drilling and completion fluids for 16 rigs on the Norwegian continental shelf The Norwegian continental shelf is the continental shelf over which Norway exercises sovereign rights as defined by the United Nations Convention on the Law of the Sea. Its major parts are the shelves of the North Sea, Norwegian Sea and Barents Sea, with the sector line in the . The contract is estimated by Halliburton to be valued at approximately $450 million and encompasses solutions offerings across both of Halliburton's business segments, Completion and Production and Drilling and Evaluation.
* Halliburton has been awarded a contract in Algeria for the provision of integrated project management for a number of delineation wells initially with the potential to expand to 120 wells for full field development.
* Halliburton has added to its integrated project management backlog with the addition of over 150 wells over the next three years in Latin America.
* Halliburton has been awarded a five-year contract for more than $100 million in the Middle East for directional/LWD services due to the success of the previous deployment of the StrataSteer[R] 3D geosteering service, InSite ADR ADR - Astra Digital Radio [TM] azimuthal az·i·muth
1. The horizontal angular distance from a reference direction, usually the northern point of the horizon, to the point where a vertical circle through a celestial body intersects the horizon, usually measured clockwise. deep resistivity resistivity
Electrical resistance of a conductor of unit cross-sectional area and unit length. The resistivity of a conductor depends on its composition and its temperature. sensor, and Geo-Pilot[R] rotary steerable system A rotary steerable system is a new form of drilling technology used in directional drilling. It employs the use of specialized downhole equipment to replace conventional directional tools such as mud motors. .
* Halliburton has entered into agreements in Brazil and Iraq for the provision of wireline logging Wireline Logging consists of measuring and recording the physical properties of the rocks in oil wells. "Logging" consists of introducing sensors in a borehole via a "wireline", an electromechanical cable. and formation evaluation In petroleum exploration and development, formation evaluation is used to determine whether a potential oil or gas field is commercially viable. Essentially, it is the process of "recognizing a commercial well when you drill one". technologies.
* Halliburton is augmenting its capability in the Caspian region in the anticipation of a significant five-year award for multiple services with the potential value of $200 million per year.
* Halliburton announced the release of the GEM[TM] Elemental Analysis Elemental analysis is a process where a sample of some material (e.g., soil, waste or drinking water, bodily fluids, minerals, chemical compounds) is analyzed for its elemental and sometimes isotopic composition. tool, which offers rapid and precise evaluation of formations with complex mineralogies. As the newest addition to Halliburton's portfolio of formation evaluation technologies, the GEM tool offers operators a complete elemental analysis solution for complex reservoirs and complements Halliburton's existing cuttings evaluation service performed while drilling. When combined with Halliburton's real-time data Real-time data denotes information that is delivered immediately after collection. There is no delay in the timeliness of the information provided.
Some uses of this term confuse it with the term dynamic data. acquisition software, it offers customers onsite and remote visualization of formation elemental data quickly and accurately.
* Halliburton launched a next-generation stimulation vessel, the Stim Star Angola, in response to operators' needs for stimulation treatments on offshore West Africa West Africa
A region of western Africa between the Sahara Desert and the Gulf of Guinea. It was largely controlled by colonial powers until the 20th century.
West African adj. & n. assets. The new vessel will serve as a high-performance platform for delivering technology and helping reduce rig downtime and associated costs for operators.
* Halliburton won three Hart's E&P meritorious mer·i·to·ri·ous
Deserving reward or praise; having merit.
[Middle English, from Latin merit engineering achievement awards. The three winning Halliburton technologies and the categories in which they won are: the Acid-on-the-Fly blending system for stimulation; Delta Stim[R] completion service for completions; and Pore Pressure and Geomechanics Solution for intelligent systems and components.
* As of June 30, 2009, Halliburton had $3.1 billion in cash and equivalents and short- and long-term investments in United States Treasury securities. The Company has $1.2 billion of unused borrowing capacity available on its revolving credit Revolving Credit
A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility and continues to maintain investment-grade debt ratings.
Founded in 1919, Halliburton is one of the world's largest providers of products and services to the energy industry. With more than 50,000 employees in approximately 70 countries, the company serves the upstream oil and gas industry throughout the lifecycle of the reservoir - from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production through the life of the field. Visit the company's Web site at www.halliburton.com.
NOTE: The statements in this press release that are not historical statements, including statements regarding future financial performance, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond the company's control, which could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to: changes in the demand for or price of oil and/or natural gas which has been significantly impacted by the worldwide financial and credit crisis; consequences of audits and investigations by domestic and foreign government agencies and legislative bodies and related publicity, potential adverse proceedings by such agencies; protection of intellectual property rights; compliance with environmental laws; changes in government regulations and regulatory requirements, particularly those related to radioactive sources, explosives, and chemicals; compliance with laws related to income taxes and assumptions regarding the generation of future taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. ; unsettled political conditions, war, and the effects of terrorism, foreign operations, and foreign exchange rates and controls; weather-related issues including the effects of hurricanes and tropical storms; changes in capital spending capital spending
Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. by customers; delays or failures by customers to make payments owed to us; execution of long-term, fixed-price contracts; impairment of oil and gas properties; structural changes in the oil and natural gas industry; maintaining a highly skilled workforce; availability of raw materials; and integration of acquired businesses and operations of joint ventures. Halliburton's Form 10-K Form 10-K
A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information.
See 10-K. for the year ended December 31, 2008, Form 10-Q Form 10-Q
See 10-Q. for the period ended March 31, 2009, recent Current Reports on Form 8-K Form 8-K
The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock.
See 8-K. , and other Securities and Exchange Commission filings discuss some of the important risk factors identified that may affect Halliburton's business, results of operations, and financial condition. Halliburton undertakes no obligation to revise or update publicly any forward-looking statements for any reason.
[TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED]