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Halliburton posts $21M 3Q loss on debt settlement

Halliburton on Monday posted a $21 million third-quarter loss due largely to a big debt repayment, but the oilfield services company did booming business and its top executive maintained a positive outlook in the face of the global economic slowdown.

The company's shares, hammered like others in recent weeks, rebounded in trading Monday.

Halliburton's loss amounted to 2 cents per share in the July-September period, in contrast to a profit of $727 million, or 79 cents a share, a year ago.

The most-recent results include a non-tax deductible loss of $693 million, or 79 cents per diluted share, related to the cash settlement of convertible senior notes and a $15 million charge tied to the acquisition of WellDynamics.

A violent hurricane season knocked off another 4 cents per share, Halliburton said.

The year-ago results included a favorable income tax benefit of $133 million, or 15 cents a share.

Third-quarter revenue rose nearly 24 percent to $4.85 billion, lifted by increased international business and rising demand in the United States.

Toss out the debt settlement and other one-time items and Halliburton said its third-quarter net income was $687 million, or 76 cents per share, ahead of Wall Street predictions. Analysts polled by Thomson Reuters were expecting earnings of 73 cents a share on revenue of $4.64 billion.

Halliburton, which has corporate offices in Houston and Dubai, said operating income rose to $1.05 billion compared with $910 million a year ago. It marked the first time Halliburton's operating income topped $1 billion.

In a conference call with investors, chairman and chief executive Dave Lesar acknowledged tough economic conditions, but he said to date the troubled equity and credit markets have had no impact on the company's operations.

As oil and natural gas producers strive to replace reserves, often in increasingly difficult formations, Lesar said he's confident clients will continue to need Halliburton's expertise to extract those resources.

Oil companies hire service providers like Halliburton and rival Schlumberger Ltd. for a variety of well-site jobs that can include seismic tests, directional drilling and reservoir management.

"Despite the growing prospects of a global economic slowdown and related decrease in hydrocarbon demand, we continue to believe in the long-term fundamentals of the oil and gas industry," Lesar said.

"We expect that any major macroeconomic disruptions will ultimately correct themselves," he added.

Halliburton Co. shares, following the downward trend of the broader market, have fallen more than 60 percent since the start of the third quarter, but they made up ground Monday.

Shares jumped nearly 8 percent, or $1.45, to $19.71 in afternoon trading, after climbing as high as $22.53 earlier. They've traded in the wide range of $15.55 to $55.38 a share in the past year.

Halliburton said North American revenue rose 22 percent from a year ago, though Lesar acknowledged some customers have announced they'll reduce capital spending - an industrywide occurrence due largely to lower commodity prices.

Outside North America, year-over-year revenue increased 25 percent, exceeding the company's target of 20 percent.

The growth was led by Latin America, where revenue rose 42 percent from a year ago. The company also said robust activity in North Africa and Saudi Arabia has been a catalyst for continued expansion in the Eastern Hemisphere.

In a note to clients, Tudor Pickering Holt & Co. called the results solid, particularly North America, where concerns linger about lower natural gas prices. Halliburton's adjusted per-share profit beat Tudor Pickering's estimate by 3 cents.

Last week, Halliburton's chief competitor, Schlumberger, said its third-quarter profit rose about 13 percent, but chairman and chief executive Andrew Gould told analysts the global economic slowdown will affect business in the fourth quarter, namely in North America and some emerging markets.

Also Monday, smaller competitor Weatherford International Ltd. said its third-quarter profit rose 27 percent on strong international growth.

Halliburton, Schlumberger, Weatherford and others have benefited in recent quarters from high oil prices, but current prices are about half what they were just three months ago, when they topped $147. Many expect an extended global recession will evaporate the world's appetite for crude.

John Poretto, AP Business Writer © 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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