When
Halliburton (NYSE: HAL) oilfield service
company reported its
third-quarter earnings, the company didn't exactly shoot
the lights out, but all in all, the results should make Fools
with a yen for oilfield service companies sit up and take
notice.
For the quarter, Halliburton managed to generate reported
income of $262 million, or $0.29 per share. These figures
compare with $672 million, or $0.74 a share for the same
quarter of 2008. Backing out $19 million, or $0.02 a share
for employee separation costs in the most recent quarter,
brings the per-share figure to $0.31, a nickel higher than
analysts' consensus expectations. Last year's third quarter
included a $15 million after-tax acquisition-related charge
and the effects of hurricanes that amounted to $33 million
after tax.
Halliburton is divided into two separate operating
entities. Its completion and production unit increased its
revenue for the quarter by $69 million from the second
quarter. At the same time, the group's operating income slid
ever so slightly on the basis of softness in several areas of
the Western Hemisphere.
The drilling and evaluation unit increased its revenue by
$25 million from the second quarter. The division was
especially strong in Russia, the Caspian, Brazil, and the
U.S., offsetting some weakness in the Middle East and
Asia.
Among the company's success in the quarter was a $190
million contract with
Petrobras (NYSE: PBR) to provide a variety of
services and materials in the offshore shelf and the
deepwater and pre-salt areas of Brazil. In addition,
Halliburton signeda three-year renewal of a contract with
BP (NYSE: BP) for software access and a
related services agreement.
It appears that Halliburton has led off for the service
group with solid results, especially sequentially. The
company will be followed
this week by
Weatherford (NYSE: WFT),
Diamond Offshore (NYSE: DO), and
Schlumberger (NYSE: SLB).
Baker Hughes (NYSE: BHI) will bring up the
rear in November.
So, by the end of the week we'll have a better handle on
the strength of the sector.
My expectation is that commodity price improvements will
benefit the group in the coming quarters, and that Fools'
time would be well spent studying especially those companies
that have something to contribute to the deepwater or the
unconventional plays.
Halliburton has been rated a four-star company among
Motley Fool CAPSplayers.
Why not add your thumbs up or down
on this
one?
This article was originally published as
Halliburton Leads Off and Smacks a Singleon
Fool.com
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