Halliburton Swings into the Red in Q1

US oilfield services giant Halliburton swung to a $1.02bn loss in the first quarter, it reported on April 20, from a $152mn profit a year earlier.

The Houston-based firm blamed the result on $1.1bn in pre-tax impairments and other charges relating to changes to cost structure to reflect current market conditions. Excluding these and other one-off factors, its adjusted net profit came to $270mn in the three months ending March 31.

The charges, coupled with a 12% yr/yr decline in revenues to $5bn, also led Halliburton to book a $571mn operating loss for the period, versus a $365mn profit a year earlier.

Halliburton said it would rein in capital spending this year by around 50% to $800mn, while targeting a $1bn reduction in overheads and other costs.

"We believe the actions we take will not only temper the impact of the activity declines on our financial performance, but also ensure that we are in a strong position, financially and structurally, to take advantage of the market’s eventual recovery," Halliburton CEO Jeff Miller said in a statement.

Hardest hit by the oil market collapse was Halliburton's North American business, with revenues slumping 25% to $2.5bn. It attributed the fall to a decrease in pressure pumping, well construction and completion tool sales. The US oil industry is facing catastrophe, with the front-end contract for West Texas Intermediate (WTI) sliding into negative territory on April 20 for the first time in history.

In contrast Halliburton's international division managed a 5% growth in revenues to $2.6bn, on the back of increased well construction activity in the North Sea and Russia, and other gains in the UAE, Mexico, Indonesia and Malaysia.