By Liz Hampton and Rithika Krishna
(Reuters) -Oilfield services provider Halliburton (NYSE:HAL) Co on Tuesday posted a 41% increase in second-quarter adjusted profit compared to the first quarter, and predicted years of growth in demand for drilling.
Driven by high oil prices, the gain was in spite of a $344 million hit from the company winding down assets in Russia in response to its invasion of Ukraine. ()
Halliburton and rival oilfield companies have benefited this year from oil prices above $100 a barrel, up 53% from the same time last year, and around 6% higher compared to the first quarter.
Chief Executive Jeff Miller said spending by international customers was on track to hit mid-teens percentage growth, predicting "multiple years" of increased activity.
He said "political agendas and under-investment" have made it hard to address energy security issues that have pushed up global prices.
Europe is dealing with fuel shortages that are eroding support among some in business and government for a move to low carbon energy. At the same time, record high temperatures are increasing concern about the continued use of fossil fuels.
The International Energy Agency last year said for the world to reach net-zero emissions by 2050, there should be no new investments in oil, gas and coal projects. [nL1N2Z00MB}
In North America, spending gains are on track to eclipse 35%, Miller said in a conference call, adding its hydraulic fracking equipment was sold out for the rest of the year.
Overall fracking capacity would remain tight in 2023 as oilfield firms have held off building new equipment, which will help support prices, Miller said.
Margins in its Completion and Production division were 17% for the quarter, the highest since 2014, said Third Bridge analyst Peter McNally.
While U.S. shale oil producers "have complained about the logistics challenges that have hampered increased drilling activity, Halliburton delivered a strong result," he said.
Halliburton's earnings per share were 49 cents, above analysts' estimate of 45 cents, IBES data from Refinitiv showed.
The Houston, Texas-based company's adjusted net income stood at $442 million compared with $314 million, or 35 cents per share, in the previous quarter.
Shares were up 1% in early trading to $29.15 and are up 26% year-to-date.
Its North America revenue, which accounts for roughly half of its sales, was 26% higher, driven in part by an increase in hydraulic fracturing and well-related services.
Net income fell to $109 million from $263 million, mainly due to the pre-tax charge from exiting Russia.