As the latest earnings season moved into its first week of full-scale activity, Halliburton
The second-largest of the services contingent chalked up earnings of $544 million, or $0.60 a share, compared with $262 million, or $0.29 per share, for the same period in 2009. However, the results for the most recent quarter included a non-cash impairment charge of $0.04 per share, along with $0.07 per share in income from the U.S. tax effects from discontinued operations. Excluding those items, its profit was $0.58 a share.
Halliburton's revenues increased to $4.67 billion, versus $3.59 billion a year ago. The consensus among analysts had been for earnings of $0.56 a share on revenues of $4.64 billion.
As I suspect will be the case with other big services companies, including Schlumberger
The company's Completion and Production unit grew its operating income by 23% from the second quarter of this year, due largely to the strength in North America. The Drilling and Evaluation sector reported a 15% sequential decline in operating income, in part because of the deepwater drilling suspension in the Gulf of Mexico. However, excluding that impairment charge I mentioned, the unit achieved slightly improved operating earnings.
The company has also completed the acquisition of Boots & Coots, resulting in "the industry's premier intervention services and pressure control product service line." It also has purchased Permedia Research Group, a supplier of petroleum systems modeling software and services. Further, Halliburton has been awarded separate contracts to perform service work in Iraq for units of ExxonMobil
So despite a post-release share price decline on Monday -- from a two-year high last week -- largely in part to disappointing European results, I'm inclined to pay attention to Lesar's prediction that, "Going forward, we expect steady, incremental increases in activity internationally will generate volume-led margin improvements as we move into 2011."
With that expectation in mind, and in the face of big North American showing, Foolish energy investors should keep a close watch on this solid and spreading services company.
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