HALLIBURTON NET INCOME $(643) MLN
Condensed Consolidated Statements of Operations
(Millions of dollars and shares except per share data)
Halliburton Company (NYSE:HAL) announced today that income from continuing operations for the third quarter of 2015 was $265 million, or $0.31 per diluted share, excluding special items. This compares to income from continuing operations for the second quarter of 2015 of $380 million, or $0.44 per diluted share, excluding special items. Adjusted operating income was $506 million in the third quarter of 2015, compared to adjusted operating income of $643 million in the second quarter of 2015. Halliburton's total revenue in the third quarter of 2015 was $5.6 billion, compared to $5.9 billion in the second quarter of 2015.
Primarily as a result of the downturn in the energy market and its corresponding impact on the company's business outlook, Halliburton recorded company-wide charges related primarily to asset write-offs and severance costs of approximately $257 million, after-tax, or $0.30 per diluted share, in the third quarter of 2015, as compared to $258 million, after-tax, or $0.30 per diluted share, in the second quarter of 2015. Halliburton recorded Baker Hughes acquisition-related costs of $62 million, after-tax, or $0.07 per diluted share, in the third quarter of 2015, as compared to $67 million, after-tax, or $0.08 per diluted share, in the second quarter of 2015. Reported loss from continuing operations was $54 million, or $0.06 per diluted share, in the third quarter of 2015, as compared to reported income from continuing operations of $55 million, or $0.06 per diluted share, in the second quarter of 2015. Reported operating income was $43 million for the third quarter of 2015, as compared to reported operating income of $254 million for the second quarter of 2015.
"We are pleased with our third quarter results, especially the resilience of our international business, where we outperformed our largest peer on a sequential and year-over-year basis for both revenue and margins," said Jeff Miller, President.
"Total company revenue of $5.6 billion declined 6% sequentially, while adjusted operating income declined 21%. North America led the decline as a result of continued activity declines and pricing pressure.
"In the Eastern Hemisphere, third quarter revenue declined by 5%, but despite activity and pricing headwinds, operating income margins remained at similar levels to the second quarter, due to our relentless focus on cost management.
"Latin America revenue and operating income declined by 4% sequentially, driven primarily by activity reductions in Mexico, partially offset by improved activity levels in Argentina.
"North America third quarter revenue declined 7% sequentially, with operating income at near breakeven levels while we continue to retain our service delivery infrastructure in anticipation of the Baker Hughes acquisition. We saw another step down in activity levels throughout the third quarter, accompanied by further price reductions across the business, especially in the pumping-related product lines, while our North America Drilling & Evaluation margins increased to 10%.
"This is a challenging market, but our strategy remains the same. We are looking through this cycle to ensure that we are positioned to accelerate our growth when the industry recovers, and we are managing through the downturn by drawing upon our management's deep experience in navigating through past cycles. Our financial results reflect our strong execution culture, and we remain focused on delivering reliable, best-in-class service quality for our customers," said Miller.
"As we continue to work toward the closing of the pending Baker Hughes acquisition, we are diligently focused on finalizing all regulatory filings, completing the divestiture process, and preparing for integration activities after the closing of the deal," added Dave Lesar, Chairman and CEO.
"We are enthusiastic about and fully committed to closing this compelling transaction, and remain confident we can achieve annual cost synergies of nearly $2 billion. We continue to maintain our superior service delivery platform and other infrastructure costs in excess of current market needs. This cost was approximately 400 basis points for North America margins in the third quarter.
"We continue to invest in technology, build capital equipment, and prepare for our pending acquisition of Baker Hughes. There are a number of moving parts in the market today, and we are not going to try to call the exact shape of recovery, but we expect that the longer it takes, the sharper it will be. Ultimately, when this market recovers we believe North America will respond the quickest and offer the greatest upside, and that Halliburton will be positioned to outperform," concluded Lesar.
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