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During 4Q17, $HAL recorded an $882MM non-cash charge, primarily as a result of a preliminary provision for net impact of tax reform. Given current U.S. tax attributes, $HAL does not expect to pay any cash tax on deemed repatriation tax obligations. $HAL sees 2018 and 1Q effective tax rate to be about 23% based on expected geographic earnings mix.
$HAL said tax reform bill is a big positive and expects this to lower effective tax rate percentage from the high-20s to 21-23% range, reflecting the new U.S. corporate rate plus state and local taxes along with geographic earnings mix. This will positively impact future earnings and help level playing field with foreign domicile competitors.
$HAL's International revenue for 4Q17 increased 11% sequentially to $2.5Bil. This resulted primarily from increased activity across multiple product services lines in Latin America, and increases in drilling and stimulation activity in the Eastern Hemisphere.
$HAL's North America revenue for 4Q17 rose 7% sequentially to $3.4Bil. This was driven primarily by higher utilization and pricing throughout the U.S. land sector in the majority of product service lines, primarily pressure pumping, as well as higher drilling activity and completion tool sales in the Gulf of Mexico.
$HAL's Drilling and Evaluation revenue for 4Q17 grew 12% to $2.1Bil from last quarter and operating income climbed 62% to $291MM. These increases were primarily due to increased drilling activity in the Middle East and North America and higher software sales and services in Latin America.
$HAL's Completion and Production revenue for 4Q17 rose 8% to $3.8Bil from last quarter. In the U.S. land sector, higher pressure pumping activity and pricing led to higher revenue while higher costs and seasonality hindered profitability.
$HAL reported a wider loss in 4Q17 due to charges related to U.S. tax reform and Venezuela receivables. Net loss widened to $824MM or $0.94 per share from $149MM or $0.17 per share last year. Revenue grew to $5.94Bil from $4.02Bil. Adjusted EPS from continuing operations jumped to $0.53 from $0.04.
For using of free cash flow, $HAL said it is still focused on debt retirement and it has $400MM maturity next year that it plans to pay off. $HAL will consider growth opportunities, both acquisitions and organic and wants to be value accretive, generate industry-leading service company returns, with speed of short duration or rapid payback.
With respect to production, $HAL said it will invest in those things that it can uniquely use to drive value for the company and will look to partner in those places where it can't. In fact with rigs, $HAL works very closely with rig contractors and had a lot of success in its project management business, driving lower cost and better returns.
For completion and production division, $HAL expects that North America revenue will outperform the average change in U.S. land rig count by several hundred basis points while international revenue will rise by low single digits. $HAL sees the operating profitability for its completion and production division to rise marginally in 4Q17.
In drilling and evaluation division, $HAL expects North America revenue will change in line with the average U.S. land rig count while international revenue to rise by low-single digits. The company expects the operating profitability for its drilling and evaluation division to rise marginally in 4Q17.
$HAL sees U.S. land results to moderate in 4Q17 due to holidays and lower efficiency levels in winter, particularly across the Rockies and Northern U.S. In international business, $HAL believes typical seasonal uptick in year-end product and software sales to be lower this year versus traditional levels as customer budgets are largely exhausted.
During 3Q17, total sand volume for $HAL continued to increase, but its average sand per well remained sequentially flat. Data points from the last two quarters and its discussions indicate customers are focused on cost-effective production. $HAL's sand per well was down in the Bakken, Rockies and Northeast, while it was up in the Permian Basin.
During 3Q17, $HAL's U.S. land rig count effectively flattened as customers reacted to shareholder input and their own view of market conditions for the balance of the year. However, $HAL's revenue increased and it saw improved activity in completions related product lines due to the natural lag between drilling and completing wells.
$HAL's International revenue for 3Q17 was $2.3 billion, a 4% increase from the previous quarter. This results primarily from increased activity across multiple product services lines in Latin America, and increased pressure pumping services and drilling activity in the Eastern Hemisphere.
$HAL's North America revenue for 3Q17 grew 14% sequentially, relative to a 6% increase in average U.S. rig count. This was due to higher utilization and pricing throughout the U.S. land sector in the majority of its product service lines, primarily pressure pumping, as well as higher well completion and pressure pumping activity in Canada.
$HAL's Drilling and Evaluation revenue for 3Q17 rose 4% to $1.9Bil from 2Q17. This was primarily due to increased drilling activity in the Middle East, North America and Latin America. In the Eastern Hemisphere, growth in its Consulting and Project Management product line was partially offset by activity declines across Asia Pacific.