HOUSTON (AP) — Halliburton's net income for the fourth quarter fell 26 percent because of a decline in North America, where drilling activity slowed and the company has been forced to charge lower prices for its services.
Still, the results beat Wall Street expectations and shares rose 5 percent.
The world's second-largest oilfield services company earned $669 million, or 72 cents per share, for the three months ended Dec. 31. That's down from $906 million, or 98 cents per share, a year ago. But excluding one-time items, earnings were 67 cents per share, 6 cents above the forecast of analysts surveyed by FactSet.
Halliburton is a major provider of the pressure-pumping technique known as hydraulic fracturing, or "fracking," which has enable drilling companies to unlock vast supplies oil and natural gas from underground shale deposits in the U.S. Natural gas production in the U.S. rose by about 20 percent between 2007 and 2011, according to the Energy Department. Halliburton's revenue rose more than 60 percent in that same period.
But now supplies of gas are plentiful and the price has dropped sharply. Natural gas futures prices averaged about $2.83 per 1,000 cubic feet in 2012, down from $4.03 in 2011. The number of rigs drilling for natural gas has fallen off, and some of Halliburton's pressure-pumping equipment is sitting idle, although a boom in oil drilling in North Dakota and Texas has offset some of the slump in the natural gas business.
Halliburton's North American operating income fell 58 percent. Schlumberger, the world's biggest oilfield services company, was able to offset the decline in drilling on land with increased revenue in the Gulf of Mexico. In addition, Schlumberger has bigger operations overseas.
Outpatient ROBOTIC HYSTERECTOMY. Trust an experienced Robotic Surgeon.