Halliburton Third-Quarter Profit Beats Estimates

Halliburton Co., the largest provider of fracking services, reported third-quarter profit that beat analysts’ estimates as U.S. oil and natural gas producers used more water, sand and chemicals to drill wells.

Net income rose 70 percent to $1.2 billion, or $1.41 a share, from $706 million, or 79 cents, a year earlier, Houston-based Halliburton said in a statement today. Excluding one-time items, the company earned $1.19 a share, 9 cents more than the average of 31 estimates compiled by Bloomberg. Sales rose 16 percent to a record $8.7 billion.

New well designs that extend further underground led drillers to use 50 percent more water, sand and chemicals to free trapped hydrocarbons by hydraulic fracturing compared to a year earlier, Chairman and Chief Executive Officer Dave Lesar said in the statement.

“North America was, from an operating perspective, better than expected,” Stephen Gengaro, an analyst at Sterne Agee Group Inc. in New York who rates the shares a buy and owns none, said in a phone interview. “Within North America, their completion and production business, which is where they thrive, was the big positive driver.”

After two years of falling prices, the cost of fracking services is expected to increase 3 percent this year in the U.S. and another 7 percent in 2015, according to an Aug. 15 report by PacWest Consulting Partners LLC.

‘Called the Turn’

“I called the turn two quarters ago,” Lesar told analysts and investors today on a conference call. “This quarter things are clearly accelerating out of that turn and we do not see momentum slowing any time soon.”

Lower oil prices haven’t led to customers slowing activity, Lesar said. Schlumberger Ltd. and Baker Hughes Inc., two other companies that provide well services like fracking, said last week they don’t foresee many long-term effects from falling crude prices.

Halliburton separately said it boosted the divided by 20 percent to 18 cents a share for the fourth quarter. The quarterly payout has doubled in the last two years.

Halliburton, which has 28 buy, five holds and one sell rating from analysts, climbed 0.6 percent to $52.92 at the close in New York. The shares have gained 4.3 percent this year.

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