Halliburton Co., the second largest oil field company, reported a 36% drop in revenue for the quarter. The decrease was significantly larger than expected. The drop is blamed on a combination of weak drilling activity and North American prices.
To offset the drop in revenue, Halliburton, Schlumberger Ltd, and other oil companies have been cutting expenses and reducing labor forces.
In the third quarter, Halliburton’s North America revenue dropped by nearly half to $2.49 billion. Approximately half of Halliburton’s total revenue comes from North America.
Outside North America, Halliburton’s revenue dropped 22.2%.
Oil services leader Schlumberger saw their revenues drop by a third for the quarter. The company is expecting drilling activity to recover more slowly than previously anticipated, followed by further cuts in spending and jobs.
Monday’s premarket trading saw Halliburton’s shares fall by about 1% to $37.49.
The company states it is working to gain regulatory approval to acquire Baker Hughes Inc, a small competitor based in Texas.
Last month Halliburton indicated it would sell three originally planned drilling businesses as well as divesting additional assets.
For the quarter ending September 30, total revenue dropped to $5.58 billion from $8.7 billion the previous year.
Halliburton experienced a loss of 6 cents per share, for a total of $54 million. A year prior, the company had asset write offs and severance costs that resulted in a net profit.
Halliburton’s earnings came to 31 cents per share, excluding items.
Thomson Reuters I/B/E/S reports that, on average, analysts had predicted a 27-cent per share profit, with a revenue of $5.64 billion.