Halliburton Co, the world's No.2 oilfield services provider, reported a better-than-expected quarterly profit, helped by buoyant shale drilling activity in North America.
Continue Reading Below
Shares of the company, which raised its quarterly dividend to 18 cents per share from 15 cents, were up nearly 4 percent before the bell.
Halliburton, which derives about half of its revenue from North America, also benefited from higher revenue in its international operations.
The company said revenue in North America grew nearly 22 percent in the third quarter ended Sept. 30, while operating income climbed 38 percent.
"Service intensity levels surged to unprecedented levels, as completion volumes per well were up more than 50 percent compared to the third quarter of last year," Chief Executive Dave Lesar said. "We expect this level of activity to continue."
Market leader Schlumberger Ltd also reported a better-than-expected quarterly profit on Thursday, helped by strong drilling in North America.
Continue Reading Below
Halliburton's revenue rose about 18 percent in the Middle East and Asia region in the quarter. Revenue in Europe, Africa and the Commonwealth of Independent States increased 9 percent, while revenue inched up 4 percent in Latin America.
Net income attributable to the company rose to $1.20 billion, or $1.42 per share, from $706 million, or 79 cents per share, a year earlier.
Excluding items, profit from continuing operations was $1.19 per share, higher than the average analyst estimate of $1.10 per share, according to Thomson Reuters I/B/E/S.
Revenue rose 16 percent to $8.70 billion, beating the average analyst estimate of $8.53 billion.
The dividend is payable on Dec. 26 to shareholders on record as of Dec. 5.
Halliburton said it cut its loss contingency for the Macondo well blowout by $100 million and recorded $95 million for an expected insurance recovery related to the settlement.
The company last month reached a $1.1 billion settlement for a majority of claims related to its role in the 2010 oil spill. The company had set aside $1.3 billion.
Up to Friday's close of $52.60 on the New York Stock Exchange, Halliburton shares had fallen nearly 26 percent over the past three months due to weak oil prices. The broader Philadelphia Oil Service Sector index declined about 21 percent. (Reporting by Swetha Gopinath in Bangalore; Editing by Sriraj Kalluvila)