Halliburton's second-quarter profit fell about 67 percent from a year ago, when it recorded a nearly $1 billion gain from its split with former subsidiary KBR, but the oilfield services provider posted record revenue and said prospects look good for the remainder of 2008.
Income from continuing operations met Wall Street forecasts, and the company said it continued to expand its business globally.
Halliburton Co., which has corporate offices in Houston and Dubai, said earnings for the April-June period were $507 million, or 55 cents a share. That compares with year-ago profit of $1.53 billion, or $1.62 a share, which included a $933 million gain from the KBR Inc. separation.
Income from continuing operations totaled $623 million, or 68 cents a share, in the latest quarter _ in line with expectations of Wall Street analysts surveyed by Thomson Financial. Those forecasts typically exclude one-time items.
Revenue rose to a record $4.48 billion from $3.73 billion a year ago, beating Wall Street's $4.25 billion average estimate.
"I'm very pleased with our results for the second quarter as we continue to show healthy expansion of our business on a worldwide basis," said Halliburton chairman and chief executive Dave Lesar, who moved his office to Dubai last year to be closer to important markets in the Middle East and Asia.
In a note to clients Tuesday, Tudor, Pickering, Holt & Co. Securities called the results "solid in an absolute sense," but it noted others in the sector had fared better than Halliburton versus Wall Street forecasts. Smaller competitors Baker Hughes Inc. and BJ Services Co., which also reported earnings Tuesday, both topped expectations by wide margins.
Halliburton shares fell $2.61, or more than 5 percent, to $46.30 Tuesday. They've traded in a range of $30 to $55.38 in the past year.
Halliburton said revenue outside North America grew 26 percent year-over-year, exceeding its 20 percent growth target. In particular, Eastern Hemisphere revenue rose 23 percent, led by increased business in Norway, Saudi Arabia, Angola and Oman.
North American sales rose 7 percent from a year ago, despite a seasonal slowdown in Canada. In the United States, inflated costs for fuel and materials were a drag on results, the company said. Pricing pressures for some services hurt too.
Last week, Halliburton's larger competitor, Schlumberger Ltd., said its second-quarter profit jumped nearly 13 percent because of an active world market for oil and natural gas, as producers scramble to take advantage of high commodity prices.
A busy oilfield bodes well for outfits such as Schlumberger and Halliburton, which provide technology, equipment and other services to help oil and gas companies find and tap new sources of fossil fuels.
Indeed, Halliburton said operating income at its drilling and evaluation arm rose 38 percent to $480 million in the most-recent quarter, the beneficiary of increased drilling worldwide.
Looking ahead, Lesar said he saw no let up in activity as many North American customers expand their drilling and well-completion budgets.
In a conference call with investors, Lesar said two massive natural gas formations _ the Marcellus Shale in Appalachia and the Haynesville Shale in parts of Texas, Oklahoma and Louisiana _ could provide opportunities for some of the company's new technology offerings.
"The formations of these plays are now yet well understood," he said.
For the first six months of the year, Halliburton said its net income amounted to $1.09 billion, or $1.20 a share, down from $2.08 billion, or $2.12 a share, in the first half of 2007. Revenue rose to $8.5 billion from $7.2 billion.
Halliburton, once led by Vice President Dick Cheney, split from KBR, the military contractor and engineering company, in April 2007. Halliburton has said the separation allows it to focus solely on its oilfield services work.
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