Delayed Halliburton Call Has Analysts Doubtful on Baker Deal

  • Earnings release postponed until May 3, due to merger deadline
  • Halliburton and Baker Hughes have until April 30 to close deal

A delay in releasing Halliburton Co.’s first-quarter earnings has raised analysts’ doubts over the prospects for a takeover of rival Baker Hughes Inc.

The release of a full earnings report is postponed to May 3 from April 25, Houston-based Halliburton said in statement released after the close of regular trading Friday. Halliburton cited the upcoming deadline to complete the Baker Hughes deal by the end of this month for the delay. Representatives for Halliburton and Baker Hughes each declined to comment on what the delay could mean for the deal.

The postponement is a signal that one or both of the companies may terminate the merger once it expires April 30, Brad Handler, an analyst at Jefferies, wrote Sunday in a note to investors. 

The company announced the Baker Hughes takeover in November 2014 in a deal now worth about $25 billion in a bid to better compete against industry leader Schlumberger Ltd. The U.S. Justice Department has filed a lawsuit to stop the merger on concern it will harm competition.

The unexpected delay in the first quarter earnings release suggests the deal may be called off, Robin Shoemaker, an analyst at KeyBanc Capital Markets, wrote Sunday in a note.

Job Cuts

The world’s largest fracking services provider announced preliminary first-quarter results Friday that included a $2.1 billion restructuring charge and eliminated 6,000 more jobs in the quarter to reduce costs. Halliburton reported an operating loss of $39 million in North America, its largest region, on revenue of $1.8 billion, according to the statement.

Halliburton shares fell 2 percent to $40.04 at 12:32 p.m. in New York.

The overall results reported were "pretty close" to expectations, Rob Desai, an analyst at Edward Jones in St. Louis, said Friday in a phone interview.

Schlumberger Ltd., the world’s largest oilfield services provider, reported a loss of $10 million, before taxes, in North America when it reported first-quarter earnings on Thursday.

"It does probably show that they’re trying to work on this deal really hard for the April 30 deadline, and they just don’t need any distractions right now," Luke Lemoine, an analyst at Capital One Southcoast in New Orleans, said Friday in a phone interview.

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