DOW JONES NEWSWIRES
Halliburton Co. (HAL) fourth-quarter net income tumbled 32% amid
a charge related to its former subsidiary KBR Inc., though the
oil-services company's sales and margins improved despite declining
demand that has been hurting the sector.
Chairman and Chief Executive Dave Lesar called the performance
"excellent," despite difficult the rapid worsening of the global
economic downturn.
The oilfield-services firm reported net income of $468 million,
or 53 cents a share, compared with net income of $690 million, or
75 cents a share, a year earlier. The latest quarter included a
per-share charge of 34 cents from a litigation settlement related
to its former KBR Inc. unit, the U.S. military's chief provider in
Iraq.
Revenue climbed 17% to $4.91 billion.
The latest estimates of analysts polled by Thomson Reuters were
for earnings of 73 cents a share on $4.82 billion in revenue.
Operating margin climbed to 24% from 22% despite lower volume
and pricing pressures, which are expected to continue this
year.
Profit at Halliburton's completion-and-production arm increased
15%, led by its Europe/Africa operations, which saw strong demand
and a more favorable product mix, though profits in the Middle
East/Asia were flat. Income was up 25% in Latin America and 13% in
the U.S.
The drilling-and-evaluation division posted a 31% rise, led by
increased direct sales in Eurasia and Africa.
Halliburton, along with Schlumberger Ltd. (SLB) and other
oil-services providers, has laid off workers and capped spending
plans in response to reduced spending by oil producers following
the sharp drop in oil and natural gas prices since a summer
peak.
On Friday, Schlumberger, the first oilfield-services company to
report results, posted its first year-on-year decline in net income
since 2003. The oil-services company said producers are slashing
spending on oilfield services faster and deeper than in past
downturns, though Chief Executive Andrew Gould declined to put an
end date on the sector's worst slump in at least a decade.
Halliburton, once led by U.S. Vice President Dick Cheney before
he took office in 2001, and KBR have come under scrutiny for
contract controversies since Halliburton was awarded a no-bid $2.4
billion contract to supply the U.S. military just before the 2003
U.S.-led invasion of Iraq.
KBR agreed last year to pay the U.S. government $8 million to
settle fraud claims related to an army supply contract.
Halliburton's shares closed Friday's session at $18.25 and
weren't active pre-market. The stock has fallen 67% since reaching
a high of $55.38 in early July.
-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310;
shirleen.dorman@dowjones.com
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