By Liz Hampton and Shariq Khan
(Reuters) – Oilfield services giant Halliburton Co <HAL.N> posted its third straight quarterly loss on Monday as it took a $2.1 billion impairment charge amid a slump in oil prices and the resulting collapse in drilling by North American customers.
Demand for drilling services and oilfield equipment offered by Halliburton and rivals Schlumberger <SLB.N> and Baker Hughes <BKR.N> sank after oil prices collapsed in March. U.S. crude futures were trading around $40 per barrel on Monday, at the bottom end of the range of what most producers need to turn a profit.
Many smaller oilfield service firms, including fracking provider BJ Services and sand provider Hi-Crush, have filed for bankruptcy since the price rout began.
Houston, Texas-based Halliburton reported a net loss of $1.7 billion, or $1.91 per share, in the second quarter ended June 30, compared with a profit of $75 million, or 9 cents per share, a year earlier.
Shares of the company rose 2.7% in premarket trading to $13.08, as market analysts praised its better-than-expected free cash flow and aggressive cost cutting.
“We believe 2Q results reflect quicker and potentially stronger cost reductions,” wrote analysts from Wells Fargo in a note following the earnings release.
The company reported free cash flow of $456 million, significantly topping analysts’ expectations.
Halliburton last quarter slashed it quarterly dividend by 75% after cutting its capital spending forecast to half, sweeping workforce reductions and executive pay cuts. It is targeting other cost reductions of about $1 billion to shore up cash.
“Halliburton is charting a fundamentally different course,” said Chief Executive Jeff Miller in a release. He praised the company’s performance in a “tough market.”
The company posted a surprise adjusted profit of 5 cents per share as a result of the cost cutting measures. Analysts had expected a loss of 11 cents, according to Refinitiv IBES data.
(Reporting by Shariq Khan in Bengaluru;Editing by Sriraj Kalluvila and Chizu Nomiyama)
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