The oil price slump took its toll on Halliburton in the first quarter as the oilfield services cut 6,000 jobs and posted a 17% decline in revenue from the previous quarter.
Announcing the layoffs on Friday, Halliburton said it took a $2.1 billion restructuring charge mainly for severance costs and asset write-offs. Sales dropped to $4.2 billion in a quarter that saw the worldwide oil rig count fall 21% to the lowest level since 1999.
“What we are experiencing today is far beyond headwinds; it is unsustainable,” Halliburton President Jeff Miller said in a news release. “My definition of an unsustainable market is one where all service companies are losing money in North America, which is where we are now.”
Halliburton also postponed its earnings conference call from Monday to May 3 to accommodate the April 30 deadline to close its acquisition of Baker Hughes. The $34.6 billion deal was intended in part to help weather the oil price downturn but it is facing an antitrust lawsuit from the U.S. Justice Department.
In trading Monday, Halliburton closed at $40.04, down nearly 2%, even though first-quarter revenue beat analysts’ estimates of $4.16 billion.
“We expect HAL’s unexpected delay in the release of its upcoming earning results to drive speculation that the pending HAL/BHI merger could be called off,” KeyBanc Capital Markets analysts wrote in a note.
Halliburton said it expects spending on drilling and completion services to fall 50% in North America this year, following a 40% decline last year. U.S. energy firms cut their oil rig count this week to the lowest level since November 2009, according to Baker Hughes.
“Life has changed in the energy industry, especially in North America, and over the past several quarters we have taken the steps to adapt to that fact,” Halliburton CEO Dave Lesar said. “Operators globally are under immense pressure, and many of our North America customers are fighting to maintain some value for their shareholders. Our goal is to work with those customers to get through these tough times.”