HOUSTON (Reuters) - Oilfield service giant Halliburton Co. (HAL), said on Thursday it reversed big losses from last year and made money in the second quarter as revenues jumped largely due to logistical support work for the U.S. military in Iraq.
The company reported net income of $26 million, or 6 cents a share, up from a loss of $498 million, or $1.15 a share, a year earlier.
Revenues jumped to $3.6 billion, from $3.24 billion in 2002, with $292 million of that coming from operations in Iraq.
Halliburton works with the military in keeping supplies flowing to the troops. It also had a contract to fight oil well fires early in the Iraq war.
The company has come under fire for its Iraq work, with critics charging that it got the contracts because of ties to its former chief executive, Vice President Dick Cheney. The charges have been denied.
Halliburton apparently did not make much money in Iraq because the engineering and construction group leading operations there reported a $148 million loss for the quarter.
``All of the hullabaloo about Iraq and, at the end of the day, they don't make money on it and it doesn't help the stock,'' said Brad Handler, analyst with Blaylock & Partners L.P.
Traditionally, the company has said, margins for government support work are narrow. But the biggest part of the unit's loss was a $104 million charge for problems with an offshore drilling and production complex under development in Brazil for Petroleo Brasileiro S.A.
The company warned in June of the Brazil writeoff and said it would take a 24 cents per share bite out of earnings. That led analysts to drop their forecasts from 25 cents per share for the quarter to 2 cents per share, according to Reuters Research, a unit of Reuters Group Plc.
Countering those problems were a robust performance by Halliburton's energy services group, which had $235 million in operating income on revenues of $1.78 billion, up from $70 million and $1.76 billion a year ago.
``The results are generally very good,'' said Prabhas Panigrahi, analyst with Kevin Dann & Partners LLC. ``They've already exceeded our expectations.''
With the earnings upswing and the Brazil charge now dealt with, he said various clouds hanging over Halliburton were beginning to clear.
``Now they can rise above the noise and focus on oilfield services,'' he said. ``There are a lot of opportunities out there for them.''
But Handler said all is not resolved, especially a proposed $4 billion settlement package for hundreds of thousands of asbestos liability claims arising from a subsidary's manufacturing. The asbestos issue has been the biggest drag on Halliburton in the past year.
``There is greater comfort among investors, but they haven't closed the book on all of those issues,'' Handler said.
Halliburton has said the cost of the settlement package may go beyond $4 billion and investors are curious if the company may benefit from a bill making its way through Congress to create a national asbestos injury fund to pay those claiming harm from asbestos exposure.
Halliburton is also under investigation by the U.S. Securities and Exchange Commission for accounting issues.
The company painted an optimistic picture for the remainder of the year, with revenue and earnings growth expected in all its business segments.
It said third quarter earnings from continuing operations of at least 32 cents a share were likely.
Analyst forecasts for Halliburton's earnings for the current quarter ranged from 26 cents to 35 cents per share, with an average estimate of 31 cents per share, according to Reuters Research.
Halliburton's stock was up over 4.5 percent and trading beyond $22 per share Thursday on the New York Stock Exchange.
Important Disclaimer! Answers, comments and opinions provided on CureZone are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. CureZone does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in messages, comments or articles on CureZone. Your use of this website indicates your agreement to these terms and those published here. Read more ...
Home
Image Gallery
New Images
Important Disclaimer!