Shortly after reporting worse-than-expected quarterly revenues, US oil field service company Halliburton Co announced a slew of changes on Monday, aimed at improving its bottom line moving forward.
One of the world's largest hydraulic fracking service providers vowed to impose cost-cutting measures in the coming month to offset the weak global demand and increasing costs.
The company, which owns hundreds of subsidiaries, branches, affiliates, and brands worldwide, promised to realize an annualized cost savings of around $300 million in the coming quarters.
Following the announcement of its plans, Halliburton saw its shares surge by as much as 7 percent. The increase in the company's stock also pulled some of its rivals higher, with Schlumberger MV seeing a 2.4 percent gain.
One of the measures that will likely be imposed is a new series of job cuts that will affect the company's 55,000-strong workforce. Earlier this month, Halliburton cut the jobs of more than 650 people in its North American operations.
The move to significantly cut cost comes at a time where global oil field service providers are finding it very hard to continue operations given the worldwide decline in oil and gas spending amid a weakening oil price environment. Halliburton, in particular, is struggling to compensate for the weak demand from North American shale producers.
Analysts have pointed out that Halliburton is now taking on its rising costs more aggressively this time around.
This could likely be due to the added pressure from Wall Street, which expects it to have a significantly strong operating margin improvement in the coming fourth quarter despite its falling revenues.
In its latest quarterly report, Halliburton reported a drop in its net profits to $295 million, or 34 cents per share. This was a significant drop from the $435 million, or 50 cents per share, profit it had recorded over the same period last year.
The company revealed that its revenues in North America, a region that accounts for more than half of its total, fell by 21 percent for its quarter ending on September 30.
Revenues also missed hitting initial analysts' expectations, with the company reporting only $5.55 billion against the $5.80 billion initially forecasted.
Halliburton warned that it may be seeing further activity decline in the region, likely resulting in a double-digit decline for the fourth quarter. Due to the decreased activities in its third quarter, Halliburton was forced to idle a good number of its equipment, the most it has idled compared to the first six months of the year.
