Stepped-up drilling for oil in the U.S. may have global producers on edge about oversupply, but the increased activity in the domestic energy sector is a boon for oil-field services firm Halliburton Co.
The Houston company reported its first quarterly increase in revenue since the fourth quarter of 2014, when oil prices fell off and started to pressure production. The company said its results in the first three months of 2017 reflected more activity in its pressure-pumping and well-construction services.
Shares, which are down 17% in the past three months but still sit 15% higher than a year ago, added 1.3% to $47.65 in premarket trading Monday.
Halliburton Chief Executive Dave Lesar said activity in North America "increased rapidly during the first quarter, which was highlighted by our U.S. land revenue growth of nearly 30%, outperforming the sequential average U.S. land rig count growth of 27%."
The number of U.S. rigs digging for oil is typically viewed as a proxy for activity in the sector. After peaking at 1,609 in October 2014, low oil prices put downward pressure on production and the rig count receded. However, the oil rig count has generally been rising since last summer. In the latest week, the number of rigs drilling for oil in the U.S. rose by five to 688, according to oil-field services company Baker Hughes Inc.
While Halliburton is reaping the benefits of higher production in the U.S., it is still pressured by international markets. First-quarter revenue from the Eastern hemisphere fell 12% from the fourth quarter.
"We are in the midst of a unique and challenging cycle with very different dynamics between the North American and international markets, " said Jeff Miller, Halliburton's president.
Over all, Halliburton reported a net loss of $32 million, or 4 cents a share, compared with a year-ago loss of $2.41 billion, or $2.81 a share. Excluding certain items, such as the early extinguishment of debt, the company said it earned 4 cents a share in the latest period.
Revenue rose 1.9% to $4.28 billion. Analysts, polled by Thomson Reuters, expected Halliburton to earn 3 cents a share on $4.26 billion in revenue.
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(END) Dow Jones Newswires
April 24, 2017 08:51 ET (12:51 GMT)