Halliburton acknowledges the cost of the hacking incident

Well solutions provider Halliburton Co. has acknowledged the impact of a data breach last August on its lower-than-expected third-quarter profits.

“We had an impact of $0.02 per share on our adjusted earnings from lost sales or delayed earnings due to the August cybersecurity event and the Gulf of Mexico storms,” Chairman, President and CEO Jeff Miller said in a company statement.

Adjusted net income – as defined by the company excluding tax adjustments, impairment charges and other charges – was $641 million, or $0.73 per diluted share. This missed the Zacks Consensus Estimate of 79 cents, which averages broker analyst forecasts.

The income statement included “a pretax charge of $116 million in the third quarter of 2024 due to severance costs, an impairment of assets held for sale, expenses related to a cybersecurity incident, a gain on an equity investment, and others. ” Article”.

On August 21, the Houston, Texas-based company reported unauthorized access “to certain of its systems” and said it had enlisted outside assistance to remediate.

“The company’s response efforts included proactively taking certain systems offline to protect them and notifying law enforcement,” it said in a regulatory disclosure at the time.

Later on August 30, Halliburton told the U.S. Securities and Exchange Commission: “The incident resulted in disruptions and restriction of access to portions of the Company's business applications that support aspects of the Company's business operations and corporate functions.”

“The company believes that the unauthorized third party accessed and exfiltrated information from the company’s systems,” it added. “The company reviews the nature and extent of the information and the notifications required.

“The company has incurred and may continue to incur certain costs in connection with its response to this incident.”

However, Halliburton said at the time that the financial impact was not “material.”

For the July-September quarter, the company reported net income of $571 million, or $0.65 per diluted share, compared with $709 million, or $0.8 per diluted share, in the second quarter of this year year. The decline was due in part to lower activity in Halliburton's product service lines in the Gulf of Mexico caused by Hurricanes Francine and Helene, as well as weaker demand for onshore pumping services in the United States

These declines in the North American business were offset by higher artificial lift activity in the U.S. mainland and stimulation activity in Canada and the Gulf of Mexico.

Meanwhile, Latin America saw lower stimulus activity, while demand for testing services fell in Mexico and the Caribbean and fixed-line activity slowed in Argentina. “Partially offsetting these declines were increased drilling-related services in Mexico and Brazil and improved project management activities in Ecuador,” the company said in its online report.

In Europe, Halliburton reported a decline in drilling-related services in the North Sea, although the region saw an increase in cementing and pipeline services.

Asia saw higher Saudi demand for pressure pumping services and completion tools, despite a decline in drilling services in the kingdom. The region generated higher fixed line activity.

Third-quarter revenue was $5.7 billion, compared with $5.8 billion in the previous three-month period. Operating income also fell sequentially from $1 billion to $871 million. Operating income, adjusted for impairments and other charges, was $987 million.

Share repurchases fell to $200 million from $250 million in the second quarter. The dividend paid for the third quarter was $0.17 per share.

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