Halliburton to boost its share buyback program

NEW YORK: Halliburton Co., the world’s second-largest oilfield services company, posted higher-than-expected quarterly profit as it made headway outside its home US market, which has been turned upside down by a natural gas glut.
The company also said on Monday it will boost its share repurchase program by $4.3 billion after buying $1 billion worth of its shares in the second quarter and leaving only $700 million authorized from an existing program set up in 2006.
Chief Executive Dave Lesar said the refreshed $5 billion buyback reflected growing confidence in the business outlook, and predicted further profit margin improvement in the North American market.
Analysts at Tudor Pickering Holt said the buybacks would grab as much attention as the results. Halliburton shares added 0.3 percent to $45.98 in premarket trading.
"While earnings were only modestly above consensus expectations and in line with our estimate, guidance for (the second half) was strong," Barclays analyst James West said in a note to clients.
The company reported a decline in second-quarter profit to $679 million, or 73 cents per share, from $737 million, or 79 cents per share, a year ago. Analysts expected 72 cents per share, according to Thomson Reuters I/B/E/S. Revenue rose 1 percent to $7.3 billion.
"Relative to our primary competitors, we have delivered leading year-over-year international revenue growth for five consecutive quarters," Lesar said in a statement.
On Friday, sector leader Schlumberger Ltd. posted higher-than-expected earnings on greater international exposure, in stark contrast to US-anchored Baker Hughes Inc.
A collapse in pricing for hydraulic fracturing services has weighed on all players as natural gas drillers have cut back, but US oil field activity is showing early signs of recovery. Barclays has data showing a 4 percent rise in drilling permits in June in the 30 states it surveys.
Lesar said he expected profit margin improvement to continue in North America after a 1.2 percentage-point rise to 17.5 percent over the second quarter.
The US gas-directed rig count fell to an 18-year low of 353 in June, even as the count outside North America climbed to its highest in 30 years, according to Baker Hughes data.
Halliburton highlighted improved activity and sales in Malaysia, China, Russia, the North Sea and Angola.
Halliburton shares are up 23 percent in the last three months, versus 18 percent for Schlumberger and 10 percent for Baker Hughes. Halliburton got a big boost in April, when it revealed talks to settle its liability related to the massive 2010 Gulf of Mexico spill.