Falling short: Truckers move oil production equipment through a Halliburton yard in Williston, North Dakota. Tariffs are having an impact on various Halliburton service lines such as its artificial lift business and drilling supplies. — Reuters
HOUSTON: Halliburton Co, the world’s largest provider of hydraulic fracturing services, fell sharply after warning investors that tariffs will impact a wide swath of the company’s business units.
The dominant North American oil field services provider told investors on a conference call that tariffs will have an impact of two to three US cents per share during the second quarter, with 60% of the hit affecting its completions-and-production unit, which houses the fracking business.
The rest of the tariffs impact will be to its drilling and evaluation segment.
The shares, which have lost about quarter of their value this year, fell 5.8% in morning trade in New York.
While customers are still digesting the latest tariff news and evaluating their drilling plans, they’re better prepared to weather an industry downturn than they were in the past, chief executive officer Jeff Miller said on the call.
“A lot’s happened in three weeks,” Miller said. “It will get digested, but the types of operators in North America are biased to working through things, I think, largely today as opposed to what we’ve seen in the past.”
Baker Hughes Co, one of Halliburton’s chief rivals, reported first-quarter earnings after the market closed, posting its lowest revenue in four quarters and falling short of analysts’ expectations.
Shares fell as much as 3.5% after the close of regular trading in New York.
Oil field servicers often provide the first indication of an industry downturn because they’re the ones hired to drill and frack new wells.
After the trade war and the Organisation of the Petroleum Exporting Countries’ recent decision to hike production hurt crude prices, investors largely expect US shale producers to avoid pumping more barrels into an oversupplied market.
Halliburton and Baker Hughes are the first major companies in the United States oil industry to disclose a specific financial impact from the global trade war.
Larger oil field service rival SLB is scheduled to report first-quarter earnings today.
Halliburton posted first-quarter revenue of US$5.4bil, the lowest since 2022, according to a statement on Tuesday.
Adjusted first-quarter profit fell to 60 US cents a share, meeting analysts’ estimates. The shares fell as much as 9.9%.
With its significant exposure to the US shale market, Halliburton offers the closest proxy to domestic oil producer activity.
Shale fracker Liberty Energy Inc expects US crude output to hold firm in 2025 as long as prices remain near current levels, chief executive officer Ron Gusek said during a call with analysts last week.
Tariffs are having an impact on various Halliburton service lines such as its artificial lift business, which helps older wells continue to pump more crude, as well as on various drilling supplies, Halliburton chief financial officer Eric Carre said.
“We are doing a lot of work on mitigating the impact of tariffs,” Carre said on the call.
“We need a bit more clarity and stability in the structure of tariffs so that we can really understand what levers we can pull and then what the overall outcome is going to be.” — Bloomberg
