Halliburton Co. said net income more than doubled in the fourth quarter as oil drilling activity remained strong away from the Gulf of Mexico.
The Houston oil services company on Monday reported net income of $605 million, or 66 cents per share, for the three-months ended Dec. 31. That compares with $243 million, or 27 cents per share, a year ago. Revenue increased 40 percent to $5.2 billion.
CEO Dave Lesar said increased drilling activity for oil and natural gas in North American shale rock formations more than offset a loss in Halliburton's Gulf of Mexico operations. The U.S. government shut down most Gulf exploration for several months following the BP oil spill in April. Drilling activity there remains limited.
"We believe any meaningful increase of activity levels in the Gulf is unlikely in the first half of the year," Lesar told analysts in a conference call.
Excluding a charge, earnings were 68 cents per share in the quarter. Analysts surveyed by FactSet had expected earnings of 63 cents per share on revenue of $4.9 billion. Halliburton shares rose more than 1 percent.
Halliburton provides a variety of equipment and services for the petroleum industry. Those services were in demand in 2010 as crude prices increased and drillers sought natural gas onshore in the U.S. Oil prices crossed the $90-per-barrel mark and hit a two-year high in December.
Lesar said the number of rigs working in the U.S. increased 4 percent from the third to fourth quarters. Halliburton raised rates for its services as activity increased, driving up operating income 10 percent and producing its highest-ever revenue in the U.S.
Halliburton also said exploration and production efforts pressed ahead in other regions, including Norway, West Africa, Iraq and Algeria. Lesar said the company was "modestly" profitable in Iraq in the fourth quarter, and plans to double its workforce in the country to 1,200 employees this year.
Global drilling activity is expected to rise 11 percent this year, according to a survey by Barclays Capital. Demand for oil services will allow companies like Halliburton to raise rates between 5 and 10 percent, JP Morgan said.
"You're looking at the beginning of a nice recovery internationally, and North America will also remain strong," Jefferies analyst Stephen Gengaro said.
Halliburton said income from completion and production operations increased three fold in the fourth quarter to $688 million. Income from drilling and evaluation operations increased 13 percent to $354 million.
The results included a charge of 2 cents per share related to an indemnity payment on behalf of KBR for a settlement Halliburton reached with Nigeria. KBR, which was spun off from Halliburton in 2007, pleaded guilty in federal court two years ago to authorizing and paying bribes from 1995 to 2004 for contracts in Nigeria.
For the full year, Halliburton earned $1.84 billion, or $2.01 per share, compared with $1.15 billion, or, $1.27 per share, in 2009. Revenue for 2010 rose 22 percent to $18 billion.
Shares increased 46 cents, 1.2 percent, to $39.65 in midday trading.
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