Energy

Halliburton says it cut 6,000 jobs in Q1, delays earnings call

Halliburton cut jobs, delays earnings call
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Halliburton cut jobs, delays earnings call

Halliburton said it cut more than 6,000 jobs in the first quarter, during which revenue slumped 40.4 percent and it took a $2.1 billion restructuring charge mainly for severance costs and asset write-offs amid the prolonged slump in oil prices.

Halliburton also postponed its earnings conference call to May 3 from April 25 to accommodate the April 30 deadline to close its acquisition of Baker Hughes, the company said in a statement after the U.S. market closed on Friday.

The No.2 oilfield services provider is scheduled to report first-quarter results on Monday, April 25. Baker Hughes is due to report on April 27, but has not held conference calls since the merger was announced in 2014.

While the deal will help Halliburton narrow the gap with market leader Schlumberger, it faces stiff regulatory hurdles.

The U.S. Justice Department filed a lawsuit this month to block the deal. European Union antitrust regulators could make its objections to the deal known to Halliburton next week, Reuters reported on Wednesday.

The merger was in part to help weather the oil price downturn that started in mid-2014, and its aftermath. Since 2014, Halliburton has reduced its headcount by about a third and slashed costs as its clients sharply reduce activity.

"Life has changed in the energy industry," CEO Dave Lesar said. President Jeff Miller said, "My definition of an unsustainable market is one where all service companies are losing money in North America, which is where we are now."

The company's first-quarter revenue dropped to $4.2 billion from $7.05 billion. Miller said Halliburton's margins have been resilient, with "decremental margins of only 22 percent for the quarter."

Schlumberger on Thursday reported negative margins for North America for the first time since the oil slump started. Margins become negative when costs exceed revenue earned.

Halliburton said it expects spending on drilling and completion services to fall 50 percent in North America this year, following a 40 percent decline last year. It expects global spending to drop 30 percent for the second straight year.

U.S. energy firms cut oil rigs this week to the lowest level since November 2009, Baker Hughes said.

Halliburton said it expects that the second quarter will mark the "landing point" for rig count. The company said it typically sees margins improving at least a one quarter after rig count flattens.