Halliburton Company (NYSE:HAL) expects 2015 to be a tough year because of a number of projects it has for the year coupled with the pricing pressure in the industry. The company plans to purchase its smaller rival Baker Hughes Incorporated (NYSE:BHI), a project that is expected to cost billions of dollars. Halliburton also intends to, further, reduce its workforce in an effort to cut costs. However, oil-field service companies are currently facing increasing pressure because of the dropping crude prices, which have seen their clients cut spending or pressure for service price cuts. Halliburton expects these and many more to make 2015 a challenging year.
Revenue up 15% in December quarter
However, for 4Q2014, Halliburton Company (NYSE:HAL) posted earnings that surpassed expectations. The company posted a net income of $901 million or $1.06 per share. That was better than $793 million or $0.93 per share in the same quarter a year earlier. On an adjusted basis, Halliburton earned $1.19 per share. The company reported that revenue for the December quarter edged up almost 15% to $8.77 billion. Analysts on the average expected earnings of $1.10 per share on revenue of $8.78 billion.
Halliburton Company (NYSE:HAL) reported 6.5% uptick in revenue to $3.3 billion in the drilling and evaluation segment. Revenue in the completion and production segment was up 20.5% to $5.47 billion.
Cost-cutting saved the day in 4Q
According to CEO, Dave Lesar, 4Q benefit from cost cuts. Although they expect to continue cutting cost to save money, Lesar warned that oil-field services industry will continue to encounter headwinds.
More job cuts to come
Halliburton Company (NYSE:HAL) reduced its workforce outside the U.S. by 1,000 last month as the company sought to offset the challenges caused by pricing pressure in the industry. It expects to lay off more workers in the U.S. as it takes its cost-cutting to the next level. Halliburton and its peers in the oilfield service industry are facing less demand for their services as clients cut capital expenditure amid price fallout in the oil industry. In some cases, service companies facing pressure from their clients to cut prices, which is hurting their margins.
Halliburton Company (NYSE:HAL) struck a deal to acquire Baker Hughes for nearly $35 billion. The acquisition is expected to help the combined company achieve more cost-saving benefits and create more value for the shareholders.
The shares of gained 1.79% and closed at $39.83 in yesterday’s trading session.