Halliburton Hits Adjusted Profit Target

Oilfield-services provider Halliburton (HAL Quote) announced Tuesday that its second-quarter net income fell 67% from a year ago after accounting for the disposal of its KBR (KBR Quote) unit, but on an adjusted basis profits were higher.

The company earned $507 million, or 55 cents a share, in the second quarter of 2008. Soaring prices for hycrocarbons convinced the firm to tweak its operating strategy last year, and it spun off its KBR unit to focus its attention on strengthening its international presence.

The sale generated $933 million in additional earnings for Halliburton in the second quarter of 2007, resulting in total net income of $1.53 billion, or $1.62 a share.

Excluding the KBR sale and other items, Halliburton's diluted earnings climbed to 68 cents a share last quarter from 63 cents a share one year earlier and matched estimates.

Traders, though, weren't impressed by the results from the world's second-largest oil-services provider, sending the stock down 5.3% to $46.30.

Halliburton generated a record $4.49 billion in revenue in the quarter, a 20.1% year-on-year gain and an 11.4% increase over the previous quarter. High prices for energy commodities spurred a wave of capital investment in worldwide drilling activity in the last 12 months, resulting in large increases in revenue from every continent where Halliburton operates.

Operating income from the firm's well-completion and production segment was $561 million last quarter, compared with $555 million a year ago and $529 million in the first quarter. The segment managed to overcome a 13% year-over-year decline in North American income with double-digit increases in its overseas regions.

According to Halliburton CEO David Lesar, North American drilling activity has lagged behind new exploration activities elsewhere because of lower natural gas prices in 2006 and 2007. However, U.S. natural gas prices caught fire in 2008 to regain levels that are globally competitive.