Halliburton Records a $1 Billion Charge

Texas-based Halliburton Co., one of the world’s largest oil field service companies, has recorded about $1.07 billion of pre-tax impairments and other charges in the first quarter of 2020, which resulted in a nearly $1.02 billion net loss for the oil field services company.

According to a press release on Monday, the charges were mostly non-cash asset impairments, primarily related to pressure pumping equipment, as well as severance and other costs.

Halliburton’s adjusted net income was $270 million excluding special items, or 31 cents per diluted share. In the same quarter a year earlier, the company had reported net income of $152 million, or 17 cents per diluted share, and adjusted net income of $201 million, or 23 cents per diluted share.

The Q1 2020 adjusted earnings per share came ahead of analysts’ average expectation of 24 cents, according to Yahoo Finance.

Revenue for the quarter was down 12 percent year over year and about 3 percent sequentially to nearly $5.04 billion but still beat the expectations of analysts at $5.01 billion.

Jeff Miller, chairman, president and CEO, stated, “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. OPEC+ production decisions and the duration of pandemic-related demand and activity disruptions will ultimately determine the extent of international spending declines this year.”

Disclaimer: We have no position in Halliburton Company (NYSE: HAL) and have not been compensated for this article.