Two weeks after laying off 350 workers at its former headquarters in Duncan, Oklahoma, the now-Houston based company reported a net loss of $1 billion or $1.16 per diluted share for the first quarter of 2020. A year ago, the company reported net income of $152 million or 17 cents a share.
The company stated that its adjusted net income for the quarter was $270 million or 31-cents a diluted share. Adjusted net income a year ago was $201 million or 23 cents a share.
Total revenue for the first quarter of 2020 was $5 billion which represented a 12% decline from the $5.7 billion reported in the first quarter of 2019. The reported operating loss for the latest quarter was $571 million.
Company leaders anticipate things to only get worse this year.
“Our industry is facing the dual shock of a massive drop in global oil demand coupled with a resulting oversupply. Consequently, we expect activity in North America land to sharply decline during the second quarter and remain depressed through year-end, impacting all basins,” commented Jeff Miller, Chairman, President and CEO. “Internationally, we believe the activity changes will not be uniform across all markets. OPEC+ production decisions and the duration of pandemic-related demand and activity disruptions will ultimately determine the extent of international spending declines this year.
It was earlier in the year when Halliburton laid off a large number of employees and closed a 3-year old command center in El Reno. Some of the workers were transferred to the older command center in Duncan where unfortunately, they were laid off this month.
At the time, the company responded with an explanation.
“Unfortunately, Halliburton is making reductions at our Duncan field camp as we adjust our workforce to reduced customer activity. This was a difficult decision, but is a necessary action as we face challenging market conditions.”
North America revenue in the first quarter of 2020 was $2.5 billion, a 25% decrease when compared to the first quarter of 2019. This decline was mainly due to reduced activity and pricing in North America land, primarily associated with pressure pumping, well construction, and completion tool sales. This decline was partially offset by increased artificial lift activity and specialty chemicals sales in North America land, and stimulation activity in the Gulf of Mexico.
“We have been through downturns before,” continued Miller. “We know what to do and will execute based on that experience. We are taking swift actions to reduce overhead and other costs by approximately $1 billion, lower capital expenditures to $800 million, and improve working capital. We will take further actions as necessary to adjust to evolving market conditions.
Completion and Production revenue in the first quarter of 2020 was $3.0 billion, a decrease of $700 million, or 19%, when compared to the first quarter of 2019, while operating income was $345 million, a decrease of $23 million, or 6%. These results were primarily due to lower pressure pumping activity and pricing and reduced completion tool sales in North America, partially offset by increased cementing activity and completion tool sales in the Eastern Hemisphere.
Drilling and Evaluation revenue in the first quarter of 2020 was $2.1 billion, which was flat from the first quarter of 2019, while operating income was $217 million, an increase of $94 million, or 76%. Higher activity for drilling-related services in the North Sea and Asia more than offset reduced activity and pricing for multiple product service lines in North America land and lower fluids activity in Latin America.
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Source: Business Wire
