Halliburton Company announced on Monday that it made a net loss of $1.0 billion, or $1.16 per diluted share, for the first quarter of 2020. According to the company, this compares poorly to net income for the first quarter of 2019 of $152 million, or $0.17 per diluted share.
The company reported that adjusted net income for the first quarter of 2020, excluding impairments and other charges and a loss on the early extinguishment of debt, was $270 million, or $0.31 per diluted share.
“This compares to adjusted net income for the first quarter of 2019, excluding impairments and other charges, of $201 million, or $0.23 per diluted share,” Halliburton said.
The company’s total revenue in the first quarter of 2020 was $5.0 billion, a 12% decrease from revenue of $5.7 billion in the first quarter of 2019. Reported operating loss was $571 million in the first quarter of 2020 compared to reported operating income of $365 million in the first quarter of 2019.
Halliburton said that excluding impairments and other charges, adjusted operating income was $502 million in the first quarter of 2020, an 18% increase from adjusted operating income of $426 million in the first quarter of 2019.
“As the world is battling the COVID-19 pandemic, I thank our employees for their dedication and focus during these difficult times. The health and safety of our employees and their families is extremely important to me. We are monitoring the situation closely and following our own guidelines, as well as those from the Centers for Disease Control and Prevention (CDC), the World Health Organization (WHO) and state and local governments. On our customers’ work sites and within our facilities, Halliburton people are getting the job done, while taking the appropriate steps to protect themselves and others,” Jeff Miller, Chairman, President and CEO commented.
“Halliburton executed well in the first quarter. Total company revenue for the first quarter was $5.0 billion, a 12% decrease year over year, and adjusted operating income of $502 million increased 18% year on year. Both our divisions delivered strong margin performance in the first quarter. Our first quarter results demonstrate that the Halliburton team is well prepared to adjust and deliver under any market conditions,” he said.
Miller gave a grim outlook for the rest of the year for the company’s activity in North America.
“Our industry is facing the dual shock of a massive drop in global oil demand coupled with a resulting oversupply. Consequently, we expect activity in North America land to sharply decline during the second quarter and remain depressed through year-end, impacting all basins. Internationally, we believe the activity changes will not be uniform across all markets,” he said.
According to Miller, OPEC+ production decisions and the duration of pandemic-related demand and activity disruptions will ultimately determine the extent of international spending declines this year.
“We have been through downturns before. We know what to do and will execute based on that experience. We are taking swift actions to reduce overhead and other costs by approximately $1 billion, lower capital expenditures to $800 million, and improve working capital. We will take further actions as necessary to adjust to evolving market conditions. 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,” concluded Miller.
Halliburton, which has operations in Guyana, recently announced that in response to the industry downtown it was cutting some 350 jobs in Oklahoma, USA. In addition, it said it was slashing the salaries of its executive employees, suspending certain contributions made to employee retirement accounts and furloughing 3,500 workers in Houston, Texas.