(Reuters) – Halliburton (NYSE:) Co posted a better-than-expected fourth-quarter profit on Tuesday, buoyed by cost cuts and a recovery in demand for oilfield equipment and services after last year’s industry slump.
The company, the industry’s second-biggest services provider, has slashed its quarterly dividend, cut its capital spending, and reduced its workforce and executive pay to cope with the decline in demand as its clients, oil and gas producers, tightened their belts and cut drilling activity.
While global crude price ticked up in the last three months of 2020 to average about $45 per barrel, service companies have been forced to provide steep discounts.
“I am optimistic about the activity momentum I see in North America, and expect international activity to bottom in the first quarter of this year,” Halliburton Chief Executive Officer Jeff Miller said.
The company’s revenue from North America rose 26% in the quarter to $1.24 billion, while international revenue grow 0.4%.
Halliburton, which kicked off fourth-quarter earnings for service companies, said total revenue rose 8.8% to $3.24 billion from the third quarter, slightly above analysts’ estimates of $3.21 billion, according to Refinitiv IBES data.
Adjusted net income attributable to company rose 60% to $160 million, or 18 cents per share, in the three months ended Dec. 31, from the third quarter. That beat analysts’ average estimate for a profit of 15 cents per share.
The company’s fourth-quarter results included a $446 million pretax charge related to its North American real estate assets.
However, its profit was down 43.9% and revenue fell 37.6% from a year earlier as activity levels were still well below last year’s.
Halliburton shares, which lost about 23% of their value in 2020, were up 2.4% at $21.24 in premarket trading.
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