Halliburton adding to North American fracking crewsJuly 21, 2014
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HOUSTON — Halliburton Co. expects continued improvement in the North American hydraulic fracturing market and is "immediately" adding crews to begin work later this year.
The world's largest provider of the service that blasts water, sand and chemicals underground to free trapped hydrocarbons, expects third-quarter operating profit margins in the region to be near 20 percent, the company said Monday in a statement. Second-quarter earnings were 32 percent above the results from the same period last year. Sales climbed 10 percent to $8.1 billion.
After two years of falling prices for fracking services from a glut in equipment, prices in the United States are expected to increase 2 percent this year and another 4 percent in 2015, according to a May 16 report by PacWest Consulting Partners.
"You're seeing tightening in overall frack capacity," Luke Lemoine, an analyst at Capital One Southcoast in New Orleans, said in a phone interview. "People are going to like this, coupled with the large North America beat."
Halliburton reported earnings that were in line with the 91-cent average of 30 analysts' estimates compiled by Bloomberg. The board of directors for the Houston-based company recently authorized an additional $4.8 billion stock buyback for a total of $6 billion.
The company boosted its operating profit margin in North America to 18.2 percent from 17.5 percent a year earlier and increased revenue there 14 percent. Lemoine was expecting margins in the region of 17.8 percent.
"We continue to be excited about the North America market, and although there may be near-term choppiness in certain international markets, we see a strong pipeline of opportunities," Chief Executive Officer Dave Lesar said in the statement.
The average number of drilling rigs active on land rose 5.6 percent in the U.S. to 1,781 in the quarter as producers seek to boost output from shale formations, according to Baker Hughes Inc.