Halliburton loss hits $602 million - Write-offs for asbestos liabilities offset gains in revenues

www.chron.com Feb. 20, 2003, 11:19PM

By NELSON ANTOSH Copyright 2003 Houston Chronicle

Halliburton on Thursday reported a fourth-quarter loss of $602 million, equal to $1.39 a share, the result of charges for asbestos and discontinued operations.

The losses offset revenue gains in both its oil-field services and engineering and construction businesses.

The Houston-based company thus joins the other big oil-field service companies, Schlumberger and Baker Hughes, which reported losses for the fourth quarter.

Halliburton's quarter included a loss from discontinued operations of $473 million, or $1.09 per share. Of that amount, $452 million represents a change in its estimate of asbestos liability, minus estimated insurance recoveries, with the rest for legal expenses covering the proposed global settlement.

The energy industry was at a low point in its business cycle, with drilling activity down, particularly in the United States and Canada.

Given the market situation, "we really had a great quarter," said Chairman, President and Chief Executive Dave Lesar.

For the year, Halliburton posted a loss of $984 million, or $2.27 per diluted share, against a 2001 profit of $809 million, or $1.88 a share.

Revenues for the fourth quarter at $3.3 billion were up 6 percent from a year ago and up 12 percent from the third quarter, while 2002 revenues at $12.57 billion were down from 2001 revenues of $13.05 billion.

Its Landmark Graphics business had a record quarter and a record year, mostly from sales of software for interpreting seismic data.

Also, there were improvements in the engineering and construction business, with fourth-quarter revenues for the group up 25 percent from the third quarter and up 30 percent year over year, although Lesar said margins still aren't large enough.

Lesar said he expects drilling in North America to pick back up during the second half, but noted that the oil workers' strike in Venezuela will have a greater effect on the company's earnings during the first quarter than during the fourth.

Halliburton's stock gained 2 cents to close Thursday at $19.42, which is up 3.79 percent for the year to date.