*profit margins are down considerably yet the market is rallying pre market because it is "less than forecast." This is the look for the week ahead.
Halliburton profit slides, but tops forecasts
EAST DENNIS, Massachusetts (Reuters) - Halliburton Co, the world's second-largest oilfield services company, posted a better-than-expected quarterly profit on Monday, boosting its shares, but it warned that North American natural gas markets were likely to stay weak through the end of the year.
Natural gas prices in the United States have tumbled to less than half of year-ago levels, and high inventories were expected to curb spending by energy producers on new wells.
Second-quarter net profit fell to $262 million, or 29 cents per share, from $504 million, or 55 cents per share, a year earlier as revenue fell to $3.49 billion from $4.49 billion, the company said on Monday.
Excluding a $12 million charge to cut jobs, Halliburton posted earnings per share of 30 cents, topping the 26 cents per share that analysts had forecast, according to Reuters Estimates. Analysts had also expected revenue of $3.41 billion.
"Due to the continued weakness in natural gas demand, reflected in the high injection rates for working gas storage, we believe it is unlikely that there will be a meaningful recovery in natural gas prices and, consequently, drilling activity for the remainder of the year," Dave Lesar, chairman and chief executive officer, said in a statement.
Last month, Goldman Sachs cut its ratings on Halliburton and other stocks exposed to natural gas because of persistent weakness in North America's huge gas market.
On Friday, Baker Hughes Inc said the number of U.S. rigs drilling for gas hit a seven-year low of 665.
Halliburton's shares rose nearly 3 percent to $22.00 in premarket trading. The stock has gained 17.6 percent so far this year through Friday's close, lagging the nearly 36 percent gain in the Philadelphia oil field service index.
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