cut its second-quarter earnings forecast, citing operating losses on an offshore drilling venture in Brazil and the need to use more cash than anticipated to settle asbestos claims.
The energy services company said Friday it expects earnings of at least 2 cents a share for the quarter, revised from a previous estimate of 23 cents a share. Wall Street was expecting earnings from Halliburton of 25 cents a share for its second quarter, according to a survey of 26 analysts conducted by Thomson First Call.
The company reported a loss of $104 million, or 24 cents a share, on its Barracuda-Caratinga project in Brazil. It completed a thorough review of the venture that yielded higher cost estimates, schedule extensions and other factors contributing to the reduced outlook.
"The performance of the Barracuda-Caratinga project is very disappointing," said Dave Lesar, the chairman, president and chief executive officer of Halliburton.
In July 2000, Halliburton was awarded contracts valued at $2.5 billion with Petroleo Brasileiro, or Petrobras, Brazil's state-run oil company, to develop the Barracuda and Caratinga offshore oil fields owned by Petrobras.
Meanwhile, the previously estimated $2.78 billion needed to fund asbestos-claims settlements won't be enough, the company said. Due to an increase in the estimated number of claims, the cash needed to fund the settlements will "modestly exceed" that figure, according to a press release.
In December, Halliburton said it had reached an agreement to pay $4 billion in cash and stock and seek bankruptcy-court protection for
, a major subsidiary, to settle more than 300,000 asbestos claims against it.
Shares of Halliburton were down almost 5%, or $1.20, at $23.23 in morning trading Friday.