Halliburton (HAL)
has had a rocky time in the public relations department ever since the 2010
Gulf of Mexico oil spill but that doesn’t seem to have rankled investors too
much even with the latest revelation that the company destroyed
evidence related to the Deepwater Horizon explosion and subsequent oil
spill.
WHO IS HALLIBURTON
Halliburton is one of the world’s largest providers of
products and services to the energy industry.
The company serves the upstream oil and gas industry 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.
DESTRUCTION OF
EVIDENCE
Thursday July 25th, the Justice Department announced that Halliburton has agreed to plead
guilty to destruction of critical evidence after
the Gulf of Mexico oil spill in 2010.
The oil services company said it would pay the maximum allowable fine of
$200,000 and will be subject to three years of probation.
The Justice Department said
Halliburton had recommended to BP, the British oil company, before the drilling
that the well include 21 metal centralizing collars to stabilize the cementing.
BP chose to use six instead. During an internal probe after the accident,
Halliburton ordered workers to destroy computer simulations that showed little
difference between using six and 21 collars, the government said, after which
the company continued to say that BP was neglectful to not follow its advice.
While Halliburton’s stock dipped
slightly following Thursday’s announcement, it surged nearly $2.00 in early
trading on Friday. This might signal
investors willingness to overlook the company’s indiscretions in favor of
profits.
2013 QE2
On July 22 Halliburton released their second
quarter 2013 earnings information.
Income from continuing operations
for the second quarter of 2013 was $677 million, or $0.73 per diluted share.
This compares to income from continuing operations for the first quarter of
2013 of $624 million, or $0.67 per diluted share, excluding a $637 million
charge, after-tax, or $0.68 per diluted share, to increase a reserve related to
the Macondo litigation.
Halliburton's total revenue in the
second quarter of 2013 was a company record of $7.3 billion, compared to $7.0
billion in the first quarter of 2013. Operating income was $1.0 billion in the
second quarter of 2013, compared to operating income of $902 million in the
first quarter of 2013, adjusted for the Macondo charge. For the first quarter
of 2013, reported loss from continuing operations was $13 million, or $0.01 per
diluted share, and reported operating loss was $98 million.
“I am pleased with our second
quarter results, as total company revenue of $7.3 billion was a record quarter
for Halliburton,” commented Dave Lesar, chairman, president and chief executive
officer.
FUTURE OUTLOOK
“For the third quarter, we
anticipate the U.S. land rig count to be flat. We are observing a continuing
trend towards multi-well pad activity among our customer base, which we believe
will result in higher service intensity. Ultimately, we believe this efficiency
trend bodes very well for us, as our scale and expertise allows us to lead the
industry in executing factory-type operations. We also expect North America
margins to continue to expand over the balance of the year. We continue to be optimistic about Halliburton’s
performance for the remainder of 2013, our ability to continue growing our
North America margins, and continued revenue and margin expansion in our
international business. We are relentlessly focused on delivering best-in-class
returns. Our recent quarterly dividend increase, aggressive stock repurchases,
and our $5 billion stock repurchase authorization reflect our growing
confidence in the strength of our business outlook,” concluded Lesar.
