NEW YORK (TheStreet) -- Shares of Halliburton (HAL) are higher by 0.39% to $38.27 in afternoon trading Thursday following the oilfield services company's announcement yesterday that it met with antitrust regulators for the first time to work out its $35 billion acquisition of rival Baker Hughes (BHI) , the Houston Chronicle reports.
Halliburton CFO Mark McCollum, who will lead the merger of the two companies, said the regulatory review process to clear the deal with U.S. and European Union authorities has begun, the Houston Chronicle added.
Halliburton noted that it expects to take a $75 million charge in the fourth quarter as it trims staff for its planned takeover of Baker Hughes, a company official said yesterday at Capital One's annual energy conference, the Houston Chronicle noted.
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Separately, fracking giant Halliburton and other oil and energy stocks have felt the effects of the declining oil prices after the Organization of Petroleum Exporting Countries lowered its projection for global demand for its oil in 2015.
OPEC now expects demand for its oil to decline to 28.9 million barrels a day next year, down from 29.4 million barrels a day in 2014, the Wall Street Journal reports.
Separately, TheStreet Ratings team rates HALLIBURTON CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate HALLIBURTON CO (HAL) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, attractive valuation levels, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HAL's revenue growth has slightly outpaced the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 16.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 70.4% when compared to the same quarter one year prior, rising from $706.00 million to $1,203.00 million.
- Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that HAL's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.65 is high and demonstrates strong liquidity.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market on the basis of return on equity, HALLIBURTON CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: HAL Ratings Report