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Halliburton's profit rises 22% in quarter

Its energy services group posts record revenue, helped in part by a light hurricane season.

October 23, 2006|From the Associated Press

Halliburton Co. said Sunday that its third-quarter net income rose 22%, thanks in part to fewer disruptions from hurricanes, which beset the oil industry last year.

The Houston-based firm's engineering unit, KBR, had $2.4 billion in revenue compared with $2.3 billion in the third quarter of 2005.

KBR has kept the company, once led by Vice President Dick Cheney, under lawmakers' microscope for its work in Iraq since a U.S.-led coalition invaded the country three years ago.

Halliburton's Iraq-related work contributed nearly $1.2 billion in revenue in the third quarter and $45 million of operating income, a performance that pleased analysts.

"Iraq was better than expected," said Jeff Tillery, an analyst with Pickering Energy Partners Inc. "Overall, there is nothing really to question or be skeptical about. I think the results are very good."

In all, the oil field services conglomerate posted net income of $611 million, or 58 cents a share, for the June-September quarter, including a $4-million charge from discontinued operations. That compares with $499 million, or 48 cents, last year, including a $7-million boost from discontinued operations.

Third-quarter revenue rose 19% to $5.8 billion.

Analysts surveyed by Thomson Financial predicted earnings of 54 cents a share on revenue of $5.52 billion.

The revenue increase was largely attributable to the company's energy services group, which posted record revenue of $3.4 billion, up 31% year over year.

"This was an exceptional quarter for Halliburton," Dave Lesar, the company's chairman, president and chief executive, said in a statement.

Even as a light hurricane season helped Halliburton, disruptions from the last two years had a chilling effect on the industry this summer, possibly stifling potential business, A.G. Edwards analyst Poe Fratt said.

"Clearly year over year it is better because we didn't have as much hurricane activity," Fratt said. "But, because the last two years have been disruptive, companies have been prepared for it and didn't do as much work" in the Gulf of Mexico.

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