Earlier this morning, the company reported second quarter earnings from continuing operations of $0.58 per share, which fell a little short of expectations. On the top line, revenues rose 24.0% year/year to $6.15 bln, which, on the other hand, topped expectations a little. Completion & Production division grew operating income by 34%, primarily driven by the strength of U.S. land.
Despite pricing levels that have yet to fully rebound from the recent down cycle, the company is achieving outstanding margins. North America had a strong performance this quarter. North America revenue in the second quarter of 2018 was $3.8 bln, a 9% increase sequentially.
International revenue in the second quarter of 2018 was $2.3 bln, a 4% increase sequentially, resulting primarily from increased drilling services and project management activity in the Middle East, as well as higher project management activity and software sales in Mexico. These increases were partially offset by lower completion tool sales in Europe/Africa/CIS, particularly in the North Sea and Angola.
This improvement was driven by increased activity throughout the United States land sector within the majority of Halliburton's product service lines, primarily pressure pumping, as well as higher drilling and artificial lift activity. Partially offsetting these increases were lower pressure pumping activity in Canada and reduced drilling fluid activity in the Gulf of Mexico.
The company said, "this is the largest and fastest growing energy market in the world. On a year-to-date basis, we have grown revenues 47% year over year, while the U.S. land rig count has increased 16%. U.S. land achieved margins that are closing in on what we achieved during the previous peak in 2014. Halliburton is better positioned for the international recovery than it has ever."
Completion and Production revenue in the second quarter of 2018 was $4.2 bln, an increase of $357 mln, or 9%, from the first quarter of 2018, while operating income was $669 mln, an increase of $169 mln, or 34%. Improvements were led by increased pressure pumping and artificial lift activity in the United States land sector.
Additionally, results improved due to higher pressure pumping services in Europe/Africa/CIS and higher completion tool sales in the Middle East, partially offset by reduced completion tool sales in Europe/Africa/CIS and pressure pumping services in the Middle East.
Drilling and Evaluation revenue in the second quarter of 2018 was $2.0 bln, an increase of $50 mln, or 3%, from the first quarter of 2018, while operating income was $191 mln, an increase of $3 mln, or 2%. These improvements were primarily due to increased drilling activity in the United States land sector, increased drilling services and project management activity in the Middle East and India, and increased software sales in Mexico. These improvements were partially offset by reduced drilling fluid activity in the Gulf of Mexico.
The company has benefited from rising U.S. oil production, which has just hit another new record in recent days. This is especially true in the Permian Basin. However, in post-earnings trade, shares of HAL are down 7%, just above its recently-hit new low for the day.