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Halliburton 4Q profit falls 40 percent due to year-ago gains, but beats analysts' expectations

Halliburton 4Q profit falls 40 percent due to year-ago gains, but beats analysts' expectations

Oil industry services provider Halliburton Co. said Friday its fourth-quarter profit fell 40 percent, due in large part to a year-ago gain, but the company reported heavy demand for its oil-field businesses and forecast much the same for 2007.
Earnings fell to $658 million (euro510.04 million), or 64 cents per share, compared with $1.1 billion (euro0.85 billion), or $1.04 (euro.81) per share, during the same period a year ago. The prior year's results included $540 million (euro418.57 million) of income, or 51 cents per share, related to a tax benefit.
Analysts polled by Thomson Financial were looking for earnings of 61 cents per share.
In a conference call with analysts, Halliburton Chairman and Chief Executive Dave Lesar offered a positive outlook for prospects this year, saying customers have indicated strong demand for oil-field services despite sliding natural gas prices.
A concern for some industry analysts is the potential for a slowdown in North American natural gas drilling in the first part of 2007. A relatively mild winter so far has weakened demand for natural gas as a heating source, which analysts say could lead to bloated inventories.
Halliburton's largest division, its energy services group, provides a variety of services to oil and gas companies, including drilling the wells and managing the reservoirs once they're tapped. The energy services group posted record revenue of $3.5 billion (euro2.71 billion) in the fourth quarter due to heavy exploration and production.
"We believe any weather-related impact on the price of natural gas will be short-lived and, if the situation occurs, will be self-correcting as activities would slow temporarily, allowing gas inventories to normalize," Lesar said.
Halliburton's quarterly revenue rose 8 percent to $6.02 billion (euro4.67 billion) from $5.57 billion (euro4.32 billion) in the previous year, topping analysts' estimates of $5.9 billion (euro4.57 billion). Gains at the energy services group were partially offset by lower revenue from KBR Inc. due to decreased activity on government services projects for the U.S. military.
KBR is Halliburton's engineering, construction and government-services arm that it partially spun off in 2006. Halliburton still owns an 81 percent stake in KBR.
KBR sales fell to $2.5 billion (euro1.94 billion) from $2.7 billion (euro2.09 billion) in the fourth quarter.
For the year, Halliburton said its net income was $2.3 billion (euro1.78 billion), or $2.23 (euro1.73) per share, down from $2.4 billion (euro1.86 billion), or $2.27 (euro1.76) a share, in 2005. Still, the 2006 result handily beat the consensus Wall Street estimate of $2.14 (euro1.66) a share.
Full-year revenue rose to $22.6 billion (euro17.52 billion) from $20.2 billion (euro15.66 billion) in 2005.


Updated : 2021-07-26 12:00 GMT+08:00