Halliburton Co's (HAL.N) quarterly profit topped Wall Street forecasts as a surge in the oilfield services company's North American operations overshadowed the impact of a shutdown in Libya.
Halliburton's oil-producing customers are spending more on new projects to take advantage of high oil prices, which surged above $100 per barrel in late February and have remained strong due to turmoil in the Middle East and North Africa.
Yet the unrest in Libya prompted the United Nations to impose economic sanctions on the country, forcing energy companies to pull out and leading to a $46 million charge for Halliburton.
That was anticipated by analysts, but a more than threefold increase in profit from its North American business was not.
"North America was even better than we thought," said Roger Read, an analyst with Morgan Keegan & Co. "International was probably as bad or worse than they thought it would be."
Most energy watchers have said they expect oilfield service markets to grow tighter in the second half of this year as work on planned projects absorbs available capacity.
That view was confirmed by Halliburton, the second-largest oilfield services company, which is more heavily exposed to North America than sector leader Schlumberger Ltd (SLB.N).
"Going forward, I feel even more confident about the prospects of our North America business in 2011 and beyond," Chief Executive Dave Lesar told a conference call. "We believe there is upside for both revenue and margins as we respond to the continued increases in service intensity."
A move toward increased U.S. oil extraction from shale, which requires more equipment and expertise, favors Halliburton due to its track record in U.S. natural gas shale production.