Halliburton, the world's second largest oilfield services provider, posted a surprise third quarter profit today, boosted by cost cutting and increased utilisation in its North American business.
Net profit at the Houston-based group came in at $6m (£4.9m), or one cent per share, in the quarter to 30 September. This was up from a loss of $54m, or six cents per share, a year earlier.
Profits beat analysts' estimates of a six cents per share loss, though Halliburton missed revenue estimates of $3.9bn as turnover fell 31 per cent to $3.8bn. Cash utilisation was in excess of $1bn.
The lifted profits were driven primarily by "increased utilisation in North America, as well as effective global cost and working capital management". In July, Halliburton said it would reduce "structural costs" by around 25 per cent (or $1bn) on an annual run-rate basis by the end of 2016.
Halliburton's share price was trading flat at $47.07 at the time of writing.
Why it's interesting
Revenue in Halliburton's North American arm, which accounts for more than 40 per cent of its business, rose nine per cent to $1.7bn.
"During the quarter, North America results improved as we took advantage of the rig count growth by increasing utilisation, working our surface efficiency model and relentlessly managing costs," Dave Lesar, chairman and chief executive said.
"As we look forward, we expect an increased commodity price to stimulate rig count growth. In the near term, we remain cautious around fourth quarter customer activity due to holiday and seasonal weather-related downtimes."
The number of active rigs in the US rose for the seventh straight week to 14 October, according to the closely-watched weekly reported from smaller rival Baker Hughes.
Read more: No slowdown for Halliburton amid oil slide
Halliburton also said seasonal year-end sales will be "minimal" and that customer pricing pressure "will continue", though these are likely to be offset by continued cost management.
Fourth quarter results, as a result, are expected to come in flat.
What Halliburton said
These results reflect the hard work and determination of our organization. While the recent cycle has provided its fair share of challenges, we out-executed even against the very high expectations we place on our organization.
Globally, we will continue to expand our portfolio in unconventionals, mature fields and deepwater. We believe the underlying fundamentals driving our industry are strengthening, and I am optimistic about Halliburton’s relative performance as we move into the new year.