By John Porretto, AP Business Writer
HOUSTON Oilfield services provider Halliburton Co. said Monday its fourth-quarter profit rose almost 5 percent from a year ago, helped by growing business in the Eastern Hemisphere, where the company is placing greater resources.
Net income in the October-December period rose to $690 million, or 75 cents per share, compared with $658 million, or 64 cents a share, during the same period a year ago.
Halliburton's quarterly revenue rose 19 percent to $4.2 billion from $3.5 billion in the previous year, topping analysts' estimates of $4.1 billion.
"I am very pleased with our performance in 2007," said Dave Lesar, the company's chairman and chief executive. "We're particularly pleased by our growth in the Eastern Hemisphere, where revenue increased 27 percent year-over-year, and operating income increased 26 percent year-over-year."
Halliburton announced last March it would split its corporate headquarters between Houston and Dubai, where Lesar now works, placing him closer to important markets in the Middle East and Asia. It also spun off its KBR Inc. subsidiary, the military contractor and engineering and construction firm, allowing Halliburton to focus on its oilpatch work.
To that end, the company opened a manufacturing facility in Malaysia in mid-2007 and another more recently in Singapore to make sure it has the tools to help customers in the region produce oil and gas.
Income from continuing operations in the most-recent quarter was $674 million, or 74 cents a share, compared with 627 million, or 61 cents a share, a year ago. Fourth-quarter 2007 results included a $22 million after-tax charge related to the impairment of oil and gas property in Bangladesh, and $8 million of after-tax expenses for executive-separation costs.
Analysts polled by Thomson Financial were looking for earnings of 69 cents a share. The estimates typically exclude one-time items.
The company, which helps oil and natural gas companies extract hydrocarbons through a variety of services, equipment and expertise, said operating income at its completion and production arm was $571 million in the fourth quarter, down 4 percent from the a year ago. The prior-year period included a $48 million gain on the sale of lift boats in West Africa and the North Sea.
The segment's operating income grew 78 percent in the Middle East and Asia but fell 9 percent in North America, a soft spot for others in the sector. The company said higher costs and lower pricing in the United States hurt North American results.
At its drilling and evaluation division, quarterly operating income was $403 million, 5 percent higher than a year ago. Results from the Middle East and Asia were off 11 percent, in part from the impairment in Bangladesh, while North America was down 3 percent.
On a positive note, Halliburton said it saw an increase in horizontal drilling activity in the United States.
Halliburton rival Schlumberger Ltd. opened the earnings season for oil-services companies Jan. 18 by reporting a 22 percent rise in fourth-quarter profit yet failing to meet Wall Street expectations. Its fourth-quarter results were driven by demand in the Eastern Hemisphere and Latin America but North American profits disappointed.
What's more, Schlumberger chairman and chief executive Andrew Gould gave a cautious near-term outlook, saying short-term growth was going to be more difficult than the immediate past.
For the year, Halliburton said its net income was $3.5 billion, or $3.68 per share, up from $2.3 billion, or $2.23 a share, in 2006. Full-year revenue rose to $15.3 billion from $13 billion in 2006.
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