By Arunima Kumar and Arathy Somasekhar
HOUSTON (Reuters) – Halliburton on Tuesday warned of a second-quarter earnings impact from tariffs and lower oilfield activity in North America as producers evaluate drilling and completions at weak oil prices, sending shares of the oilfield service producer down nearly 10%.
Halliburton is the first of the Big Three U.S. oilfield services providers and among the first large oil company to report earnings as U.S. crude prices hover under $64 a barrel. Many companies say they cannot drill profitably if oil prices fall under $65 a barrel, impacting demand for equipment and services provided by companies like Halliburton.
“Many of our customers are in the midst of evaluating their activity scenarios and plans for 2025 activity reductions could mean higher than normal white space for committed fleets and in some cases, the retirement or export of fleets to international markets,” Jeff Miller, Chief Executive Officer of Halliburton, said about expectations in North America markets. White spaces refer to gaps in the calendar when the company’s does not have work lined up for its equipment.
The company’s shares were down about 9.5% to $19.85 a share in early trading after it forecast a 2-cents to 3-cents per share impact in the second quarter from ongoing trade tensions. Shares were down 25% year-to-date, while rival SLB’s was down only 11% this year.
Second quarter earnings were estimated to be 63 cents per share, according to LSEG data.
The oilfield service sector is bracing for the impact of President Donald Trump’s tariffs that are expected to disrupt supply chains and drive up the cost of equipment such as drilling rigs and well casings from duties on steel imports and parts.
Halliburton said North America revenue in first-quarter was $2.2 billion, a 12% decrease from a year earlier.
The company’s international operations helped cushion the impact from the sluggish demand in North America, led by a 6% year-on-year revenue increase in the Middle East and Asia. It forecast year-over-year international revenue to be flat to slightly down.
Halliburton forecast its completion and production division revenue to increase 1% to 3% in the second quarter from the first and margins to remain about flat. The company’s drilling and evaluation division revenue was expected to be flat to down 2% and margins were set to decline 125 to 175 basis points.
The Houston-based company posted a profit of $204 million, or 24 cents per share, in the three months ended March 31, lower than $606 million, or 68 cents per share, it posted last year.
