Halliburton Company (NYSE:HAL) experienced losses in 1Q2015, in light of the reduced oil prices.
Halliburton is ranked second in oil-field services. The oil field service provider that is based in Houston Texas claims that its clients have brought down their crisis and were in the pursuit of price discounts.
The company’s chief executive said that the company is most likely to experience harder times especially due to the volatile market. Halliburton has had to cut down on some of its expenses in the recent past in a bid to maintain profitability. Other strategies include the recent initiative to acquire the rival company, Baker Hughes Incorporated (NYSE:BHI).
There are further plans to cut down on expenses. The company intends to lay off 6400 people. Most of the layoffs will occur in the United States while at least 1000 from regions outside the USA.
Changes in the oil market came just as the company was in the middle of striking the Baker Hughes deal. During the making of the contract, the deal was estimated at $35 billion. That was before the company came into hard times, with the realization that the oil market was oversupplied with oil. This meant low demand for oil-field services offered by the company.
The company’s shares had gone down by 23% over the past year. However, they recently improved by 11 cents to rest at $47, more than analysts had expected. The new acquisition is expected to work in the favor of both companies. Low competition should result in more profits, and the joint efforts promise new ideas and potential growth for the two companies.
Write-downs, severance packages, and write-offs amounted to $823 million within the last three months. The revenues also went down by 4% to rest at $7.1 billion. Analysts say that the company will have to adapt to cut back on its expenditure and adapt to the low demand.