By Arunima Kumar and Liz Hampton
(Reuters) -Halliburton Co's fourth-quarter adjusted profit doubled from a year earlier, it said on Monday, beating analysts' forecasts and prompting the oilfield services company to lift its dividend following a rebound in crude and natural gas prices.
U.S. oil prices rose more than 50% last year and have made a strong start to 2022, hovering around $85 a barrel, thanks to the global economic recovery from the coronavirus pandemic and supply cuts by producer group OPEC.
That has encouraged producers to ramp up drilling activity, with the U.S. rig count rising 68% year-over-year to 586 at the end of the fourth quarter, according to Baker Hughes data.
Rivals Schlumberger (NYSE:SLB) and Baker Hughes topped market expectations for fourth quarter earnings last week, with Schlumberger's top executive likening current market conditions to those experienced during the last industry supercycle.
"This is momentum that I have not seen in a long time," Halliburton (NYSE:HAL) Chief Executive Jeff Miller told investors on a call.
The Houston, Texas-based firm said it would boost its dividend to 12 cents, payable on March 23, up from a 4.5 cents dividend previously.
Miller said he anticipates spending in North America to grow by more than 25% in 2022 and that pricing for hydraulic fracturing will move higher, with incrementals up 30%. He said the company has been able to pass along higher prices for trucking, sand and other inputs to customers.
Halliburton estimates the North American completions market is nearing 90% utilization, and said its fleets are currently sold out. Fully electric hydraulic fracturing locations are expected to take up a larger share of the market, Miller told investors.
Internationally, he anticipates mid-teens spending growth.
Wall Street analysts said the results were positive, with the exception of margins in its Completion and Production unit, which missed estimates. On Monday, Miller said margins in that unit would likely be sequentially flat for the current quarter, while margins in its Drilling and Evaluation unit would be flat to down 50 basis points.
The company's shares were down more than 4% in early trading to $26.42, following declines in U.S. crude futures which were off more than 3% to $82.49.
Halliburton's fourth quarter adjusted net income totalled $320 million, or 36 cents per share, topping Wall Street estimates of 34 cents a share, according to Refinitiv IBES. Adjusted net income was $160 million, or 18 cents per share, a year ago.
Revenue of $4.3 billion also beat analysts' expectations of $4.1 billion.