Its former CEO's seat at the right hand of the President of the United States doesn't benefit Halliburton (NYSE:HAL) at all. OK, I can't even write that with a straight face. Halliburton may be a fine business in its own right, but its fortunes have certainly improved over the past five years. Tomorrow, the company reports on the most recent of those years: fiscal 2005. Here's what we know so far.

Wall Street Wisdom:

  • General consensus. Twenty analysts follow Halliburton, and regardless of their political affiliation, they understand that the company benefits from a strong political tailwind these days. Seventeen of those analysts rate the stock a "buy," and only three say "hold."
  • Revenues. Revenue growth isn't the story here. Consensus estimates call for the company to grow fourth-quarter sales by less than 1% over Q4 2004.
  • Earnings. Here's the real story: Analysts believe that Halliburton doubled its profits in Q4 2005, in comparison to last year. $0.89 per share is the call.

Margin watch:
Halliburton's margins aren't a pretty sight. Forget what you hear on the TV news -- the company just doesn't make windfall profits. On the contrary, Halliburton earns a gross margin that's barely the equal of wholesalers like BJ's (NYSE:BJ) or Costco (NASDAQ:COST). Further down the income statement, you'll notice that Halliburton wasn't even profitable in much of 2004.

Marg. %

6/04

9/04

12/04

3/05

6/05

9/05

Gross

4.9

5.4

5.7

7.3

10.4

11.9

Op.

3.3

3.6

4

5.7

8.8

10.1

Net

(8.1)

(8.3)

(4.8)

(2.8)

2.5

5.2

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ending in the named months.

Fools look further:
Much as I love to track margins, you can actually see Halliburton's strength better if you look somewhere else: the trends in how long it takes to collect payment on its services (days sales outstanding, or "DSO") and in how long it can hold off creditors before paying for wares (days payable outstanding, or "DPO"). Here's how the company has performed over the past few years:

12/00

12/01

12/02

12/03

12/04

9/05

DSO

105.4

112.4

107.1

89.0

83.6

77.2

DPO

23.7

26.6

29.5

34.2

38.3

40.9

Data from fiscal years ending in the months named; 2005 data based on TTM results through September.

From 2000 to today, Halliburton cut the time between doing its work and collecting on its bills by 27%. Even more impressive is its clout with creditors: It's increased the amount of time it can put off paying its own bills by 72%. Halliburton is a strong business, and getting stronger by the day.

How long can it keep this up? Three more years sounds about right to me.

Fool contributor Rich Smith does not own shares of any company named above. Costco is a Motley Fool Stock Advisor pick. The Fool has a disclosure policy.