Halliburton (NYSE:HAL), the second-largest of the oilfield service companies, jumped in ahead of Schlumberger's (NYSE:SLB) typical earnings lead-off in its sector Monday, chalking up results that, as expected, were shadows of their former selves.

For the quarter, net income was $274 million, or $0.30 per share (excluding $12 million related to employee separations) beating consensus expectations by $0.03 on the per-share line. For the same quarter a year ago, the company's earnings were $504 million, or $0.55 a share. Revenue for the second quarter of 2009 slipped to $3.5 billion versus $4.5 billion for the same quarter a year ago.

The major culprit in the company's earnings slide was the plunge in North American drilling activity, which saw the average rig count fall in the quarter by 39%. As the company noted, about 43% of the activity in the United States has shifted to unconventional plays -- such as the Haynesville Shale, the Barnett Shale, and the Fayetteville -- which typically involve horizontal drilling. 

Halliburton CEO Dave Lesar stated that, for a variety of reasons, the downturn in the international markets has been less pronounced. As such, "Operating margins outside of North America remained at 20%.” Nevertheless, "We rationalized our costs to offset pricing pressures; however, customers have continued to focus on aggressively lowering their project costs."

Looking at the company's results in each of its segments, the Completion and Production unit generated operating income of just $243 million, versus $537 million for the same quarter of the prior year. The Drilling and Evaluation segment experienced an income decline from $504 million a year ago to $284 million.

Expect most of the oilfield services companies, from Schlumberger on down, to suffer similar circumstances as they report their respective quarters. For instance, Weatherford (NYSE:WFT) also reported its results on Monday, and they were not pretty. Baker Hughes (NYSE:BHI) will likely report a downturn when it releases in early August. And even the deepwater drilling twins, Transocean (NYSE:RIG) and Diamond Offshore (NYSE:DO), will probably see their earnings slide as well.

But despite this somewhat bleak picture, I am in total agreement with Lesar when he says, "We believe that the long-term economic fundamentals of our industry are bright." For that very reason, I'm convinced that Fools would be wise to maintain an element of oil patch stocks in their investment portfolios.   

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Fool contributor David Lee Smith doesn't own shares in any of the stocks listed above. He does, however, welcome your questions or comments. The Fool has an iron-clad disclosure policy.