A pair of oil-service giants posted solid revenue gains on the strength of continued high energy prices, though bottom-line results were more mixed. At New York-based Schlumberger ( SLB), latest-quarter continuing operations profits rose to $255 million, or 43 cents a share, up from the year-ago $146 million, or 25 cents a share. The latest quarter included a charge, without which the second-quarter profit was $288 million, or 48 cents a share. Revenue rose to $2.86 billion from $2.54 billion a year earlier. The results were on the light side of Wall Street's analyst consensus estimates, which called for earnings of 49 cents a share on revenue of $2.93 billion. The company also set a buyback of up to 15 million shares. "Second-quarter activity remained strong across a wide range of GeoMarkets and technologies. Continued growth in Russia and the Caspian, and strong performance across Asia and the Middle East, were both very encouraging. North America pricing moved up satisfactorily in the quarter," Schlumberger chief Andrew Gould said. "WesternGeco continued to show significant improvement in backlog for both Q technology and conventional activity. The growing realization that at current levels of demand very little spare oil production capacity exists will ensure continued strong growth over the coming quarters." At Houston's Halliburton ( HAL), the latest quarter swung to a loss after mounting charges on an asbestos liability case. The company posted a continuing operations loss as well, after a big expense tied to a struggling Brazilian project. For the second quarter ended June 30, the company posted a continuing operations loss of $54 million, or 12 cents a share, and a bottom-line loss of $663 million, or $1.51 a share. A year ago the company posted a continuing operations profit of $42 million, or 9 cents a share. Revenue surged to $4.96 billion from $3.6 billion a year earlier, driven by strong gains at the KBR unit.
Continuing operations in the latest quarter were hit by a loss of $200 million, or 46 cents a share, on the Barracuda-Caratinga project. Halliburton attributed its 38% revenue gain to additional activity on government services projects in the Middle East in the Engineering and Construction Group known as KBR. The Energy Services Group had improved operating income in each of the four segments. Revenues increased 7% in second-quarter 2004 compared to the prior-year period, and operating income for ESG was up 15% in second-quarter 2004. ESG second-quarter 2003 operating income included a $24 million pretax gain related to the sale of Halliburton Measurement Systems, or HMS. "I am very pleased with our ESG operating performance during the quarter," said CEO Dave Lesar, chairman, president and chief executive officer of Halliburton. "We continue to see growth and improvement in the energy services business. The rig count continues to increase, while our uplift in pricing, coupled with our focus on cost control, are providing stronger margins. "Also, last week's confirmation of the Plan of Reorganization by the United States Bankruptcy Court was, we believe, a significant step forward on our path for resolving our asbestos liability. With this confirmation, we are encouraged that we will soon receive a favorable judgment as the plan moves to the district court. The large additional operating loss on Barracuda-Caratinga in the quarter was disappointing, but we have enhanced our project management and increased our effort to complete this difficult project." On Friday, Halliburton was at $31.04 and Schlumberger at $64.26 a share.