Houston-based Halliburton booked a $641 million first quarter net loss on Monday but managed to beat analysts targets as the service sector contends with the worst drilling downturn in years.
The company’s total first quarter revenue slid to $7.1 billion, a 4 percent drop from the first quarter of 2014.
Despite the revenue dip Halliburton beat analysts forecasts that had pegged first quarter revenue at about $6.96 billion, Reuters said.
Income for continuing operations excluding special items fell to $418 million, or $0.49 per share, down from $623 million booked during the same period last year.
First quarter adjusted operating income tumbled to $699 million from $970 million during the first quarter of 2014.
Halliburton also recorded $823 million in after-tax company-wide charges “as a result of the recent downturn in the energy market and its corresponding impact on the company’s business outlook.”
The company confirmed on Monday that it laid off about 9,000 employees, or 10 percent of its global workforce, during the last two quarters.
“Additional actions will likely be required in the second quarter although we expect further charges will be significantly smaller,” senior vice president of finance Christian Garcia said during an investors call.
Halliburton reported strong international performance in the first quarter despite curbed upstream spends.
Revenue tied to Latin America rose by 10 percent while operating income in the region saw a 22 percent spike compared to the first quarter of 2014.
Middle East and Asia revenue climbed 13 percent while operating income in the region jumped by 33 percent from the same period last year.
The company said “significant activity declines” in Angola and the Norwegian sector of the North Sea drove its Europe and Africa first quarter revenues down 16 percent and dragged operating income for the region down 41 percent on a year-over-year basis.
Chairman and CEO David Lesar said the company expects ongoing “pricing pressure” on its services until rig counts stabilize.
“Industry prospects will continue to be challenged in the coming quarters, and visibility to the ultimate depth and length of this cycle remains uncertain,” Lesar said.
President Jeff Miller said that while the international rig count has only dropped 9 percent since peaking last July customers are still deferring new projects, especially in the offshore exploration market.
“Looking back over the last several major cycles, the speed of this downturn has been historically high,” Miller said.
The company said it expects further revenue declines in the second quarter as the U.S. rig count continues to drop.
Last month Halliburton’s pending $34.6 billion merger with Houston-based rival Baker Hughes won approval from stockholders in both companies.
The transaction must still get a green light from regulators and is expected to close late in the second half of 2015.