"This mission is too important for me to allow you to jeopardize it." -- HAL, 2001: A Space Odyssey

Our vice president's favorite oil services company, Halliburton (NYSE:HAL), had a great second quarter. Not surprisingly, the market took notice and sent the stock 8% higher in early trading Friday.

Total revenue was up only 4%, but that's OK when analysts are expecting a 2% year-over-year decline. Income from continuing operations was also quite strong, and Halliburton's performance of $0.76 a share was well ahead of mean analyst guesses.

The energy services group was the star of the show. Revenue was up 30%, and operating income climbed 93%. There was strength almost anywhere you care to look. In the production optimization division, income doubled on increased demand for well stimulation; fluid systems income headed 75% higher on higher drilling activity; and income more than doubled in drilling and formation evaluation.

While the company's KBR business didn't do great, it was considerably less of a drag in this quarter and actually contributed to income. Revenue dropped 12% in the second quarter, but operating income came in at $122 million -- reversing a year-ago loss. Halliburton's efforts to support U.S. troops in Iraq have improved, and the company earned award fees. All told, work related to Iraq totaled $1.4 billion in revenue and $48 million in operating income.

I was pleased to hear management reiterate its intentions to eventually get rid of the KBR business. I'm sure there's substantial opportunity to improve margins here and drive greater profitability, but I'd rather see the business spun out or sold off. As a pure-play oil services company, I would expect to see Halliburton get a more favorable valuation in the stock market.

It's tricky to compare Halliburton's oil-field services business straight up to Schlumberger (NYSE:SLB), but there's no doubt that Halliburton is seeing exceptional growth right now, and the market is hot for oil services companies.

That said, there are some political and ethical aspects to the Halliburton story that might put off some investors. I'm not particularly interested in making political or ethical statements with my investing or my writing, so I'll simply say that investors have every right to asses the situation for themselves and decide whether they're comfortable owning these shares.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).