Oilfield services provider Halliburton Co. (HAL, Financial) reported fourth-quarter and full-year 2019 results before the opening bell on Tuesday, disclosing a $2.2 billion charge to earnings on the back of weakening North American shale activity.
As a result, the Houston-based company swung to a $1.7 billion loss for the quarter, but recorded adjusted earnings of 32 cents per share, which topped Refinitiv’s estimates of 29 cents as it saw higher drilling activity internationally. Revenue declined 6% from the prior-year quarter to $5.2 billion, but beat expectations of $5.1 billion.
For the full year, Halliburton posted an earnings loss of $1.29 per share on $22.4 billion in revenue, which was down 7% from 2018.
In a statement, Chairman, President and CEO Jeff Miller said that while North America revenue decreased 21% sequentially in the fourth quarter and 18% for the year due to reduced customer activity and pricing, Halliburton saw international sales grow 10% sequentially and annually.
“While we expect customer spending in North America to be down again this year, we will continue executing our playbook, implementing our service delivery improvement strategy, and focusing on maximizing our returns,” he added. “2020 opens a new decade and a new century for Halliburton. We will continue to focus on delivering margin expansion, industry-leading returns and strong free cash flow.”
Halliburton has said previously that it needs to reorganize its business in the U.S., which is its core market. As part of this initiative, it has been laying off staff and scrapping drilling equipment over the past year. Part of the impairment charge accounted for severance costs. The company also said it expects to record an additional $50 million in charges in the current quarter.
With a $21.25 billion market cap, shares of Halliburton were trading 1.5% higher at $24.32 on Tuesday morning. After declining nearly 10% in 2019, GuruFocus estimates the stock has fallen another 2% year to date.
Of the gurus invested in Halliburton, Dodge & Cox has the largest stake with 5.20% of outstanding shares. Other top guru investors include Richard Pzena (Trades, Portfolio), Sarah Ketterer (Trades, Portfolio), Bill Nygren (Trades, Portfolio), Hotchkis & Wiley, Ken Fisher (Trades, Portfolio), Charles Brandes (Trades, Portfolio), Pioneer Investments (Trades, Portfolio), Tweedy Browne (Trades, Portfolio), Mario Gabelli (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), John Hussman (Trades, Portfolio), Caxton Associates (Trades, Portfolio) and Michael Price (Trades, Portfolio).
Disclosure: No positions.
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