Halliburton (HAL - Get Report) said its net losses nearly quadrupled compared to a year ago, to $2.4 billion in the first quarter, or $2.81 per share, mostly due to charges related to the cancellation of its $35 billion purchase of Baker Hughes (BHI) after regulatory opposition.

Sales also slid 40% to almost $4.2 billion, compared to $7.05 billion in the first quarter of last year.

Excluding special items, Halliburton was actually in the black, with income from continuing operations of $64 million, or 7 cents per diluted share, which was down 76% from the fourth quarter but higher than the 4 cents per share analysts on average were expecting. Adjusted operating income came in at $225 million in the first quarter vs. $473 million in the fourth quarter.

The Houston oilfield services giant said in the release Tuesday that market conditions continued to hurt its business in the first quarter, with the rig count declining to historic lows in the face of continued depressed commodity prices, which created further widespread pricing pressure and activity reductions for the company's products and services globally.

As a result, Halliburton recorded company-wide charges related primarily to asset impairments and severance costs of $2.1 billion after-tax, or $2.39 per diluted share, in the first quarter, vs. $192 million after-tax, or 22 cents per diluted share, in the fourth quarter.

Because it terminated its merger with Baker Hughes, Halliburton said it would no longer sell the businesses it had proposed, resulting in $378 million, or 44 cents per share, in after-tax charges representing the associated depreciation and amortization expense and divestiture costs, vs. $79 million, or 9 cents per share, in the fourth quarter.

The company also incurred interest expense of $45 million after-tax, or 5 cents per diluted share, associated with the $7.5 billion of debt issued in late 2015, compared with $27 million, or 3 cents per diluted share, in the fourth quarter.

Halliburton said its reported loss from continuing operations amounted to $2.4 billion, or $2.81 per diluted share, in the first quarter vs. $28 million, or 3 cents per diluted share, in the fourth quarter. Its reported operating loss was $3.1 billion vs. $86 million in the fourth quarter.

The company preannounced some of its first-quarter results on April 22, including the 40% sales drop, the $2.1 billion restructuring charge and 6,000 additional job cuts in the quarter.

Analysts at Tudor Pickering Holt said there were no surprises in the earnings report, and they see no reason to change their view of the company "given its premier position in North American completion services heading into what we believe will be a U.S. well completions-led oilfield service industry recovery starting up later this year."

In a conference call with analysts and investors, Halliburton Chairman and CEO Dave Lesar said management knew putting together two companies with global size and scale would be "no small task" and would attract regulatory scrutiny, but the companies believed that the deal would provide substantial cost synergies, cash flow and earnings accretion and reductions in customers' costs per barrel. He said obtaining antitrust approval had become time-intensive and difficult, adding that the Department of Justice's conclusions about the deal were "incorrect."

"We proposed a divestiture package worth billions of dollars that would facilitate new competition. We had buyers expressing strong desire to acquire those businesses, [which were] complete divisions and worldwide product lines," he said. "They addressed most of the markets alleged."

Lesar said because of the further downturn in the market while the deal was pending, the company couldn't get adequate valuation for the businesses it wanted to divest, which cut the deal's potential accretion to levels that "severely undermined" what was originally expected. "It became clear that continuing to pursue the transaction was not in the best interest of shareholders, even with paying the [break-up] fee," he said.

"No doubt we are disappointed," he continued. "But you know what? We are Halliburton, and we will continue to provide the innovative services and products that we've delivered to our customers for 97 years."

Acting CFO Christian Garcia said the company will have $3.6 billion in cash and cash equivalents on its balance sheet after paying the $3.5 billion break-up fee, giving it ample liquidity for its operations, which require $1 billion to run annually, and for possible organic expansion, acquisitions and stock buybacks. However, the company's net debt to capitalization will climb to around 45% from 30%, which he says is still very manageable.

Gimme Credit analyst Philip Adams downgraded his rating on Halliburton's debt on the debt news to deteriorating from stable.

Iberia Capital analyst Rob MacKenzie asked on the call if Halliburton would make an offer to acquire Baker Hughes' production chemicals and artificial lift businesses, which it wanted out of the merger. But Lesar wouldn't speculate. "Believe me, I have lawyers shaking their heads at me like crazy right now," he said.

Lesar did say Halliburton would not follow Baker Hughes in only selling pressure pumping equipment in a limited number of basins.

"To be successful, you have to have a nationwide business. If you're committed to being an integrated services company, you have to take some downside that may not give you returns," he said. "But when [the market] does bounce back and you're making hay, it's better to be in every market with every product line. Our strategy is to be a full-service company in every place our customers want us to work."

Halliburton agreed to buy Baker Hughes in November 2014, saying it would sell $7.5 billion in assets to gain regulatory approval. But last month the Department of Justice filed a civil antitrust lawsuit in the U.S. District Court in Delaware seeking to the block the purchase, claiming that it threatened to eliminate competition, raise prices and reduce innovation in the oilfield services sector.

Halliburton and Baker Hughes said Sunday they agreed to cancel the deal, with Halliburton paying Baker Hughes a $3.5 billion break-up fee.