The company said that the decline in profits, which amounted to a loss of 2 cents per share, was due to $637 million in charges stemming from the company's role in the Gulf of Mexico oil spill. However, when adjusting out these expenses, Halliburton posted adjusted earnings of 67 cents per share, which was enough to beat consensus estimates of 57 cents.

International Business Looking Strong

The earnings-per-share beat was helped by better operating income in North America, which grew 30% sequentially. Likewise, the company benefited greatly from a 21% surge in its international business, which included double-digit performances across all geographies. This is even though international margins weren't as impressive as in North America -- albeit in line with expectations.

Since posting a 5% revenue decline in international business in the third quarter, Halliburton's management has now posted two consecutive quarters of 20% revenue increases in international markets, which affirms that Halliburton is gaining traction against Schlumberger.

Clearly, the company's new focus on international markets is working well --much more quickly than even the company expected. Still, this doesn't erase concerns about prolonged weakness in North America, especially because Halliburton has more North American exposure than both Baker Hughes and Schlumberger.

What About the Stock?

I've always liked Halliburton. This is despite Schlumberger tending to get most of the media praise. In fact, I believe the company is now in one of the best positions it has ever been, given how well management is performing internationally. The question, though, is to what extent have rig counts bottomed, and what will be the next drivers of growth?

It's worth noting here, however, that this is more of a question about Halliburton's valuation than it is about execution. Investors need to decide if now is the right time to enter the stock. I don't believe it is. On a long-term basis, I think the stock should do well. But if oil prices and rig counts suffer more weakness, the stock can easily lose 10%.

At the time of publication, the author held no position in any stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Richard Saintvilus is a private investor with an information technology and engineering background and the founder and producer of the investor Web site Saint's Sense. He has been investing and trading for over 15 years. He employs conservative strategies in assessing equities and appraising value while minimizing downside risk. His decisions are based in part on management, growth prospects, return on equity and price-to-earnings as well as macroeconomic factors. He is an investor who seeks opportunities whether on the long or short side and believes in changing positions as information changes.

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