By Liz Hampton and Arunima Kumar
-Oilfield company Halliburton Co on Tuesday topped Wall Street earnings estimates and offered an upbeat view for energy services demand as the downturn in oil drilling activity recedes.
The Houston, Texas-based company kicked off results for the oilfield services with a 33% jump in second-quarter profit from the previous three months.
Crude oil futures hit $77 a barrel in early July – the highest since late 2018 – on falling inventories and rising demand. Oil traded on Tuesday around $69 a barrel amid concerns that a spike in COVID-19 infections could dampen demand just as OPEC+ producers this week agreed to increase supply.
Second quarter profit rose to $227 million, or 26 cents per share, from $170 million, or 19 cents per share, in the first quarter. Wall Street anticipated earnings of 23 cents per share. Halliburton suffered a loss of $1.91 per share on impairment charges in the year-ago quarter.
“We believe that we are in the early innings of a multi-year up-cycle. For the first time in seven years, we anticipate simultaneous growth in international and North America markets,” said Halliburton Chief Executive Jeff Miller.
His bullish outlook includes drilling and well completions spending in North America rising by double-digit percentage gain over the next two years. He also expects double-digit growth in international oil activity for the second half of this year compared with the same period in 2020.
Shares were up 3.6% in afternoon trading at $20.06.
Halliburton reported $3.707 billion in revenue for the second quarter, slightly missing revenue estimates of $3.735 billion, according to data from Refinitiv IBES data.
Still, analysts said the results were positive, pointing to the earnings beat and improved margins.
“The margin performance that buoyed results should be enough to drive relative outperformance for HAL today,” analysts for investment firm Tudor Pickering & Holt Co wrote on Tuesday.
Rivals Baker Hughes Co and Schlumberger NV also are expected to post quarterly profits after big losses a year ago.