posted a huge second-quarter loss on asbestos exposure, taking a one-time charge of $391 million to cover future claims.
The company, which has come under fire recently for the asbestos liability as well as a federal investigation into its accounting when Vice President Dick Cheney was a director of the company, reported a loss of $498 million, or $1.15 a share, for the quarter, compared with a profit of $382 million, or 90 cents a share, a year ago.
The charges include $391 million after tax for asbestos exposure, as well as a pretax loss of $119 million to write down its engineering and construction project in Brazil. Halliburton said a leading economic firm has concluded that its total remaining asbestos related exposure is $602 million, after expected insurance recoveries of $1.6 billion.
Halliburton warned of substantial second-quarter charges Monday, changing its previous way of handling asbestos claims. Previously the company has only taken charges for liability incurred up to that point, instead of future liability.
Excluding charges relating to discontinued operations, the company lost $358 million, or 83 cents a share, compared with a profit of $143 million a year ago. Analysts had been expecting a pro forma profit of 16 cents a share, according to Thomson Financial/First Call.
Operating revenue fell to $3.2 billion from $3.3 billion last year.
Halliburton also announced a corporate reorganization, saying its goal of 1,600 job cuts has almost been reached. The restructuring is expected to save about $200 million a year.
Halliburton wasn't the only company hurt by an asbestos blowup Wednesday, as
, Europe's largest electrical engineering company, posted an unexpected second-quarter loss, claiming a rise in asbestos litigation.
The company said asbestos claims have risen about 10%, while settlement costs have also risen.
ABB lost $13 million, or 1 cent a share, in the quarter, compared to a loss $128 million, or 11 cents a share, a year ago. Pending asbestos claims against the company are up to 102,700 in the first half of the year, up from 93,500 at the end of 2001.