Oilfield services company Halliburton said on Tuesday it expects growth in its international business this year, but North American revenue will likely remain flat due to weak demand for drilling.
Oil and gas producers have been acquiring international and offshore drilling inventories amid higher oil prices, boosting prospects for equipment and services at Halliburton and rivals.
"The international market remains tight for equipment and people, and therefore we expect to see margin expansion over last year," Halliburton CEO Jeff Miller said. He expects the company's international revenue to grow in the low double-digit percentage rate this year.
First-quarter revenue from the international segment rose 12% from last year to $3.3 billion, driven by 21% growth in Latin America.
Its international gains contrasted with North American revenue, which declined 8% from a year ago to $2.5 billion, and faces further headwinds from weak U.S. natural gas pricing.
The decline in natural gas prices to near three-and-a-half-year lows has operators in the U.S. curtailing activity, further hurting demand for drilling services.
"While we expect an eventual recovery in natural gas activity driven by demand from LNG expansions, our 2024 plan does not anticipate this recovery," Miller added.
For full year 2024, Halliburton said it expects its North American business to deliver flat revenues and margins year-on-year despite lower activity levels.
In 2023, its North American revenue was $10.49 billion, while international revenue was $12.53 billion.
Shares of the company were down less than 1% at $38.53 in morning trading.
The Houston, Texas-based company posted an adjusted profit of 76 cents per share for the three months ended March 31, topping analysts' average estimate by 2 cents, according to LSEG data.
Total quarterly revenue of $5.80 billion also beat estimates of $5.67 billion.
Rival SLB reported a 14% rise in first-quarter profit on Friday, in line with analysts' estimates as higher oil and gas drilling demand in the Middle East and Africa also helped offset weakness in North America.
(Reuters - Reporting by Arunima Kumar in Bengaluru; Editing by Pooja Desai and Michael Erman)
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