AP News

Halliburton shares fall on N. American outlook

DALLAS (AP) — Halliburton Co. shares fell Tuesday after the oilfield-services company said that revenue from North America will be lower in the third quarter than in the second quarter.

THE SPARK: The company's chief financial officer said less drilling and weaker prices for oilfield services would reduce North American profit margins by 2.5 to 3 percent. CFO Mark A. McCollum said at an investor conference that North American revenue could be down by a mid-single-digits percentage instead of being flat with the second quarter, as the company previously expected. The resulting decline in profit margins should ease around the end of the year, he said.

THE BIG PICTURE: Drilling activity has eased as natural gas prices have fallen in the U.S. Last week, there were 4 percent fewer active oil and gas rigs in the U.S. than a year ago, according to Baker Hughes Inc., and that has depressed prices for companies such as Halliburton.

In the second quarter, 57 percent of Halliburton's revenue came from North America. Rising costs and weak prices hurt North American margins in the quarter, and the Houston company reported nearly flat net income of $737 million despite a 22 percent gain in revenue.

SHARE ACTION: Halliburton shares were down 64 cents, or 2 percent, to $32.12 in afternoon trading. They fell as low as $31.03, a decline of 5.3 percent, earlier in the session. The stock has ranged from $26.28 to $43.08 in the past 52 weeks.

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