AP: Halliburton 1Q profit likely to rise
Associated Press 04.18.08, 3:59 PM ET
NEW YORK - Oilfield service provider Halliburton Co. reports its first-quarter earnings before the opening bell Monday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Halliburton (nyse: HAL - news - people ) has increasingly been shifting its focus toward rapidly developing regions in the Eastern Hemisphere. That strategy has helped the Houston-based company offset the effect of higher costs and lower pricing in North America, where it and competitor Schlumberger Ltd. (nyse: SLB - news - people ) have seen profits increasingly squeezed.
Schlumberger kicked off the latest round of oilfield service earnings Friday with lower-than-anticipated first-quarter results. Investors drove Schlumberger's shares higher, however, after the company predicted future growth and announced plans to buy back shares.
"While a Schlumberger miss is probably not great for the sector, overall North America (results were) better than expected, which is positive for Halliburton" and other oilfield service companies, Goldman Sachs (nyse: GS - news - people ) analyst Charles Minervino wrote in a note to investors.
Halliburton investors will be eager to hear any details about a report this week that the company has held talks with Expro International Group PLC about a possible all-cash buyout of the European oil field contractor.
Halliburton disclosed its involvement Friday, a day after a group of private equity investors said it will buy Expro International for $3.2 billion. The company said it is "conducting its due diligence at Expro" and that its offer would top the bid already on the table.
BY THE NUMBERS: Analysts, on average, expect Halliburton to earn 64 cents per share on revenue of $3.99 billion according to a survey by Thomson Financial.
ANALYST TAKE: Minervino, like other analysts, is expecting a "broadly uninspiring" earnings season for oil service stocks. Record-high oil prices, however, mean that the long-term outlook for Halliburton and other companies is likely to be optimistic, he said.
"The international picture remains bullish long-term," he said. "We see Halliburton and Oil States International Inc. (nyse: OIS - news - people ) as potential first-quarter outperformers given our expectation for more positive commentary on U.S. and Canadian drilling activity."
WHAT'S AHEAD: The tone of Halliburton's outlook will set the stage for a number of other key oilfield companies - including Baker Hughes Inc. (nyse: BHI - news - people ), BJ Services Co. (nyse: BJS - news - people ), Smith International Inc. (nyse: SII - news - people ) and Weatherford International (nyse: WFT - news - people ) Ltd. - that are due to report earnings in the first part of the week.
STOCK PERFORMANCE: Shares recovered from a slide in the first three weeks of the quarter and have been on a largely upward trajectory ever since. After Schlumberger reported earnings Friday, Halliburton shares surged more than 5 percent to an all-time high of $47.77.
Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed
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