Halliburton Co HAL
Q2 2013 Earnings Call Transcript

Transcript Call Date 07/22/2013

Operator: Good day, ladies and gentlemen, and welcome to the Halliburton Second Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Kelly Youngblood. Sir, you may begin.

Kelly Youngblood - IR: Good morning, and welcome to the Halliburton's second quarter 2013 conference call. Today's call is being webcast and a replay will be available on Halliburton's website for seven days. The press release announcing the second quarter results is also available on the Halliburton website.

Joining me today are Dave Lesar, CEO; Jeff Miller, COO; and Mark McCollum, CFO. Tim Probert, President of Strategy and Corporate Development will also be available today for follow-up calls.

I would like to remind our audience that some of today's comments may include forward-looking statements reflecting Halliburton's views about future events and their potential impact on performance. These matters involve risk and uncertainties that could impact operations and financial results and cause our actual results to materially differ from our forward-looking statements. These risks are discussed in Halliburton's Form 10-K for the year ended December 31, 2012, Form 10-Q for the quarter-ended March 31, 2013, and the recent current reports on Form 8-K.

We will welcome questions after we complete our prepared remarks. We ask that you please limit yourself to one question and one related follow-up to allow more time for others who have questions.

Now, I'll turn the call over to Dave.

David J. Lesar - Chairman, President and CEO: Thank you, Kelly, and good morning to everyone. Overall, I'm pleased with our second quarter results. Total Company revenue of $7.3 billion was a record quarter for Halliburton and operating income was over $1 billion. We achieved record revenues this quarter in our Baroid, Cementing, Completion Tools, Multi-Chem and Testing product lines. From an operating income perspective, Baroid, Testing and Artificial Lift also set new records.

Turning to the geographies, our international operations grew 8% sequentially, which is at the top of our peer group. This growth came from record revenues in both of our Eastern Hemisphere regions. Compared to our two primary competitors, we have delivered leading year-over-year international revenue growth over the last five quarters. Also notable for the quarter, our international revenue comprised almost half of our total company revenue, which clearly demonstrates the success in our ongoing strategy to grow our international business and balance our geographic mix. So clearly, we are not just a North America pressure pumping company.

Our Eastern Hemisphere played out as we expected. Revenue was up 11% sequentially, and operating income was up 23%. I want to specifically highlight our Middle East/Asia region, which had an outstanding revenue growth of 20%, and operating income growth of 43% relative to the second quarter of last year. This is a very exciting market for Halliburton today, and we expect our Middle East/Asia region to be the highest growth one that we have led by Saudi Arabia, Iraq and all of Asia.

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