The company warns investors in its earnings report of the impact of tariffs have on the sector.
Halliburton has reported a decline in first-quarter profit due to reduced drilling activity in North America, which weakened demand for its oilfield services and equipment.
The Houston, Texas-based oil and gas giant warned on Tuesday of a second-quarter earnings impact from tariffs and lower oilfield activity in North America as producers reckon with weak oil prices, sending shares of the oilfield service provider down about 6 percent.
The oilfield service sector worries United States President Donald Trump’s tariffs on imported steel and parts will disrupt supply chains and drive up equipment costs, such as drilling rigs and well casings. Halliburton said its first-quarter North American revenue was $2.2bn, down 12 percent from a year earlier.
Halliburton is the first of the big three US oilfield services providers (Schlumberger and Baker Hughes are the other two) and is among the first large oil companies to report earnings as US crude prices hover under $64 a barrel. Many companies say they cannot drill profitably if oil prices fall under $65 a barrel, denting demand for equipment and services provided by companies like Halliburton.
“Many of our customers are in the midst of evaluating their activity scenarios, and plans for 2025 activity reductions could mean higher than normal white space for committed fleets and in some cases the retirement or export of fleets to international markets,” Halliburton Chief Executive Jeff Miller said about expectations in North American markets.
White spaces refer to gaps in the calendar when the company does not have work lined up for its equipment.
Shares down
Halliburton shares were down about 6 percent at $20.62 a share after it forecast a 2-cent- to 3-cent-per-share impact in the second quarter from trade tensions. Second-quarter earnings were estimated to be 63 cents per share, according to LSEG data. Shares had fallen as much as 10 percent on Tuesday and were down 24 percent so far this year. Rival Schlumberger’s shares were down only 11 percent this year.
Halliburton’s Q1 international revenue eased 2 percent primarily due to lower drilling and project management activity in Mexico. It forecast year-over-year international revenue to be flat to slightly down.
Mexico is proposing new contract models for the oil sector while struggling to pay off billions of dollars of accumulated debt to oil service companies. In the meantime, state company Pemex’s oil output has continued falling this year to 1.62 million barrels per day, compared with 1.76 million barrels per day last year.
Halliburton posted a profit of $204m, or 24 cents per share, in the three months that ended on March 31, lower than the $606m, or 68 cents per share, it had posted last year.
The company also took a $107m severance cost in the first quarter. That came on the heels of a $63m severance charge in the third quarter of 2024 but the company did not provide more details.
Excluding a $356m pre-tax charge, which included the severance charge, the company posted earnings of 60 cents, in line with analysts’ estimates.
Revenue of $5.42bn beat analysts’ average estimate of $5.28bn.