2005 Was The Best Year For Halliburton, $1.1 Billion Profit

Halliburton swings to $1.1 billion profit, cites 2005 as company's best

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By Steve Quinn
ASSOCIATED PRESS
5:45 p.m. January 26, 2006

DALLAS – Oilfield services conglomerate Halliburton Co. swung to a profit in its fourth quarter on robust sales and increased rig activity, and called last year the best in its 86-year history.

The income reversed a loss from a year earlier for Houston-based Halliburton, the company once led by Vice President Dick Cheney. Its KBR unit has become known for its support work for troops stationed in the Middle East.

Net income was $1.1 billion, or $2.08 a share, including a gain of $540 million or $1.02 a share, for a future tax allowance. That compared to a net loss of $203 million, or 46 cents a share last year, which included a $384 million loss from discontinued operations.

Fourth quarter revenue rose 12 percent to $5.8 billion, largely from the performance of its energy services group, which saw sales increase 31 percent.

The results, $1.03 per share excluding the gain, widely beat Wall Street's projections of 89 cents a share on revenue of $5.24 billion, according to Thomson Financial.

Like many other companies in oil-related business, Halliburton enjoyed the fruits of boom times, said analyst Jeff Tillery of Pickering Energy Partners.

“They were really helped by the oilfield business being so good and taking advantage of energy being in the upcycle,” Tillery said.

Revenue at KBR, Halliburton's engineering and construction division, fell 3 percent to $3 billion, which the company said resulted from reduced military work in Iraq.

“It was less of a decline that we expected, so Iraq was really in line of how we modeled it,” Tillery said.

Net income for the year 2005 was $2.4 billion, or $4.54 per share, compared to a loss of $1 billion, or $2.22 per share, from 2004. The 2004 loss included a $1.4 billion, or $3.09 per share, loss related to the settlement of asbestos and silica liabilities.

Revenue for 2005 reached nearly $21 billion, a record that also beat analysts expectations of $20.4 billion.

“This demonstrates our customers' willingness to pay a premium for our technological expertise that results in accelerated production rates,” Dave Lesar, Halliburton's CEO, said in a statement.

Halliburton announced earnings after the market closed. The company plans to discuss the results Friday morning in a conference call with analysts.

During its earnings call last quarter, the company reiterated plans to either sell or spin off KBR, but said no timeline had been established.

Halliburton has been taking heat since the beginning of the war in Iraq for receiving multibillion-dollar, noncompetitive government contracts.

Congressional Democrats have contended that the Bush administration has long played favorites to Halliburton because of its ties to Cheney.

The latest round of controversy surfaced this week when former Halliburton officials claimed water for a U.S. base was contaminated and that the company failed to notify troops and civilians. Halliburton denied any contamination troubles at Camp Junction City in Ramadi, Iraq.

Shares of Halliburton rose 91 cents to close at $75.15 on the New York Stock Exchange. They added another 1.6 percent, or $1.20, in after-hours trading.