Oilfield services giant Halliburton Company (NYSE:HAL) this morning reported mixed Q3 earnings results and noted that the fourth quarter could be challenging, although it sees an improving macro picture for the oil and gas industry in general.
The Houston-based company reported Q3 EPS of $0.01, easily topping Wall Street analysts’ view for a loss of $0.06. Revenue plunged 31.3% from last year to $3.83 billion, missing expectations for $3.9 billion.
North America Q3 revenue rose 9% from last year to $1.7 billion, while International revenue gained 6% to $2.2 billion.
Looking ahead, HAL noted that it remains cautious about fourth quarter activity because of the holiday season and weather-related downtimes. However, the company did say that the macro picture is almost certainly improving for both the company and its oil and natural gas exploration customers.
The company commented via press release:
During the quarter, North America results improved as we took advantage of the rig count growth by increasing utilization, working our surface efficiency model and relentlessly managing costs. Our North America business delivered 9% sequential revenue growth, and operating results improved by $58 million, which represents 41% incremental margins. This is a step in the right direction as we work to regain profitability in North America.
As we look forward, we expect an increased commodity price to stimulate rig count growth. In the near term, we remain cautious around fourth quarter customer activity due to holiday and seasonal weather-related downtimes. However, it does not change our view that things are getting better for us and our customers.
Halliburton shares rose $0.53 (+1.13%) to $47.60 in premarket trading Wednesday. Prior to today’s report, HAL had gained 38.28% year-to-date amid a strong bounce in oil prices and increased exploration activity.
ETF investors will note that Halliburton represents a huge portion of the Market Vectors Oil Services ETF (OIH). HAL is OIH’s second largest holding at around 15%, second only to Schlumberger (~20%).