The company has warned investors about revenue reports regarding the impact of tariffs.
Halliburton reported a decline in first quarter profits due to a decline in drilling activity in North America, weakening demand for oilfield services and equipment.
The Houston, Texas-based oil and gas giant on Tuesday warned producers of second-quarter revenue impacts from North American tariffs and lower oilfield activity in light of lower oil prices, bringing down shares in oil service providers by about 6%.
The oilfield services division is concerned about tariffs on US President Donald Trump’s imported steel and parts. It disrupts the supply chain and reduces equipment costs such as drilling rigs and well casings. Halliburton said its first quarter North American revenue was $2.2 billion, down 12% from the previous year.
Halliburton is the first of three big US oil field service providers (Schlumberger and Baker Hughes are the other two) and is one of the first large oil companies to report revenues as US crude prices are under $64 a barrel. Many companies say that oil prices are less than $65 a barrel and can’t drill profitably if they dent the demand for equipment and services offered by companies like Halliburton.
“Many of our customers are in the midst of evaluating activity scenarios, and plans for reductions in activity in 2025 could mean a normal white space for dedicated fleets and, in some cases, fleet retirements or retirements to or exports to international markets.”
White space refers to the calendar gap when the company is not lined up for its equipment.
Share
Harriburton shares fell about 6% at $20.62 per share after forecasting a 2-3 cent impact from trade tensions from the second quarter. LSEG data showed revenues for the second quarter were estimated at 63 cents per share. Stocks fell 10% on Tuesday, falling 24% so far this year. Shares in rival Schlunberger fell just 11% this year.
Halliburton’s first quarter revenues eased by 2%, primarily due to lower drilling and project management activities in Mexico. It predicts a slight decline in international revenues from the previous year.
Mexico has struggled to propose a new contract model for the oil sector and pay accumulating billions of dollars in debt to oil services companies. In the meantime, state Pemex’s oil production continues to decline to 1.62 million barrels per day this year, compared to 1.76 million barrels per day last year.
Halliburton recorded profits of $204 million, or 24 cents per share, for the three months ended March 31st. This was published last year.
The company also covered $107 million in retirement costs in the first quarter. It came shortly after a $63 million retirement request in the third quarter of 2024, but the company did not provide details.
Excluding the $356 million pre-tax fee, including retirement benefits, the company recorded a profit of 60 cents in line with analyst estimates.
The revenue of $5.42 billion is an average analyst estimate of $5.28 billion.