Halliburton loss grows as it takes Baker Hughes charges

HOUSTON (Bloomberg) -- Halliburton’s first-quarter loss widened as customers slashed budgets in half and the company took charges related to the failed $28-billion merger with Baker Hughes Inc.

The merger was called off Sunday in the face of stiff resistance from global regulators over antitrust concerns. Halliburton, the world’s largest provider of fracing services, recorded first-quarter costs of $378 million, or 44 cents a share, related to the Baker Hughes bid, according to a statement Tuesday. That’s higher than the $79 million, or 9 cents a share, acquisition-related costs in the final three months of the year.

Overall, Halliburton reported a loss of $2.4 billion, or $2.81 a share, deeper than a loss of $643 million, or 76 cents, a year earlier. Excluding certain items, profit was 7 cents a share, higher than the 4-cent average of 36 analysts’ estimates compiled by Bloomberg. The company also eliminated 6,000 more jobs in the quarter to reduce costs, according to a statement April 22.

The oil services industry is operating at a loss in North America, home to the world’s largest market for hydraulic fracturing. Schlumberger Ltd., the biggest oil servicer, lost $10 million in the U.S. and Canada, excluding taxes, during the first three months of the year. Halliburton, the world’s No. 2 provider, reported an operating loss of $39 million in North America, its largest region, on revenue of $1.8 billion, according to an April 22 statement announcing preliminary results.

The second- and third-largest oil-service firms had set a deadline for the end of April to complete the deal or walk away. The U.S. Justice Department heard concerns from dozens of companies and ultimately concluded that the deal was "not fixable at all," David Gelfand, deputy assistant attorney general, told reporters Monday on a conference call.

“In accordance with Generally Accepted Accounting Principles, and in conjunction with the termination of its merger agreement with Baker Hughes, Halliburton determined that its proposed businesses to be divested no longer meet the assets held for sale criteria as of March 31, 2016,” the company said in the statement.

Halliburton announced the Baker Hughes takeover in November 2014 in a bid to better compete against industry leader Schlumberger. The U.S. Justice Department filed a lawsuit in early April to stop the merger, saying it threatened to eliminate head-to-head competition in 23 products and services used in oil exploration.

The statement was released before the start of regular trading in New York.