Oil services company Halliburton (HAL) reported that its net income more than doubled in the third quarter as a surge in onshore North American natural gas activity offset the suspension of drilling in the Gulf of Mexico. Despite that, Halliburton shares opened over 4% lower.
The world's second-largest oilfield services company reported earnings of $544 million, or 60 cents per share, for the quarter. In the same period last year, Halliburton earned $262 million, or 29 cents per share. Excluding items, adjusted earnings were 58 cents per share, topping analyst estimates of 56 cents per share.
Revenue increased 30% from $3.59 billion to $4.67 billion, slightly below Wall Street expectations of $4.78 billion. Revenue in North America increased 13% sequentially and 85% from last year to $2.38 billion. But international markets experienced some setbacks and saw mixed growth that led to flat sequential revenue.
Halliburton, which provided services to BP (BP) in the well in the Gulf of Mexico that blew up and caused a massive oil spill, felt the impact of the government's moratorium on deep water exploration for several months after the disaster. But Halliburton had other businesses to offset the lost revenue. "Strong sequential revenue growth was seen in North America," which experienced a record quarter.
"Our third quarter results illustrate our ability to leverage our balanced geographic portfolio as the unique strength of North America contrasted against flat performance in the international market," said CEO Dave Lesar.
"Going forward we expect steady, incremental increases in activity internationally will generate volume-led margin improvements as we move into 2011," Lesar said. "Longer term, we believe that the global economic recovery will increase the demand for liquids and the technology needed to unlock the next generation of complex reservoirs.