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updated: 10/17/2012 8:54 AM

Halliburton 3Q profit falls on drilling slowdown

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Associated Press

NEW YORK -- Halliburton Co. said Wednesday its third-quarter net income fell 12 percent as drilling activity declined and costs rose in its core North American business.

The Houston energy services company earned $602 million, or 65 cents per share, down from $683 million, or 74 cents per share, a year ago.

Revenue rose 9 percent to $7.11 billion. That was the smallest year-over-year revenue growth since the first quarter of 2010.

The results fell short of Wall Street expectations, according to a poll by FactSet.

Halliburton said the natural gas rig count on land in North America dropped by 18 percent in the quarter as companies slowed production. Natural gas prices were down 29 percent from a year ago as U.S. supplies remained high. As of Sept. 28, the nation's supply of natural gas stood at 3.6553 trillion cubic feet, up 8 percent from a year earlier.

Halliburton has a bigger chunk of its business in North America than its peers, so it's feeling a bigger pinch from the drilling slowdown created by lower gas prices.

The number of on-land oil rigs rose 3 percent in North America during the summer quarter as oil prices rose 9 percent. But that wasn't sufficient to offset the decline in natural gas drilling.

Overall, revenue fell 5 percent in North America

Costs rose due to higher prices for materials used in hydraulic fracturing, commonly referred to as "fracking," and activity disruptions due to Hurricane Isaac.

The picture was brighter overseas. The company's international revenue rose 2 percent despite a 2 percent decrease in rigs, due to strength in Latin America, the Middle East and Asia.

Halliburton shares fell 49 cents to $34.56 in premarket trading.

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