The world’s largest provider of the service that blasts water, sand and chemicals underground to free trapped hydrocarbons, expects third-quarter operating profit margins in the region to be near 20 percent, the company said today in a statement. Second-quarter earnings were 32 percent above the results from the same period last year. Sales climbed 10 percent to $8.1 billion.
After two years of a falling market for fracking services from a glut in equipment, prices in the U.S. are expected to increase 2 percent this year and another 4 percent in 2015, according to a May 16 report by PacWest Consulting Partners LLC.
“You’re seeing tightening in overall frack capacity,” Luke Lemoine, an analyst at Capital One Southcoast in New Orleans, who rates the shares the equivalent of a buy and owns none, said in a phone interview. “People are going to like this, coupled with the large North America beat.”
The average number of drilling rigs active on land rose 5.6 percent in the U.S. to 1,781 in the quarter as producers seek to boost output from shale formations, according to Baker Hughes Inc. (BHI)
Halliburton reported earnings that were in line with the 91-cent average of 30 analysts’ estimates compiled by Bloomberg. The board of directors for the Houston-based company recently authorized an additional $4.8 billion stock buyback for a total of $6 billion.