On the Call: Halliburton CEO Dave Lesar
Halliburton Co. said Wednesday that a decline in revenue in its core North America market was largely responsible for a 12 percent decline in third-quarter profit.
Dave Lesar, CEO of the oil services company, said the next couple of quarters could be "pretty bumpy" in North America, where low natural gas prices have caused some customers to pull back on production.
In a conference call, Lesar told analysts how Halliburton plans to react if production slows down during the current quarter:
"There remains significant uncertainty around customer activity levels throughout the fourth quarter.
Now, we've been running our people and equipment flat out for the past several years. So if this short-term drop in activity happens, we will not chase lower-priced transactional work to keep our crews busy or to gain market share. This is something we traditionally would have done.
We will instead stack our equipment and reduce labor costs by working with our employees to minimize the temporary impact of these disruptions. The reason we are taking a different approach this time is because we believe these issues are transitory and we do not want to take the risk of lowering the pricing baseline for a problem that we expect to go away in a couple of quarters, or to have our customers believe that such pricing would be the new normal going forward."