Halliburton Reports 1999 Second Quarter Earnings
DALLAS, July 22 /PRNewswire/ -- Halliburton Company (NYSE: HAL) reported
today that the company's 1999 second quarter net income was $83 million
($.19 per share diluted) compared to $243 million ($.55 per share diluted)
earned in the 1998 second quarter. Consolidated total revenues were
$3.7 billion in the 1999 second quarter, 20 percent lower than the year ago
quarter. The $83 million of net income was benefited by $32 million after tax
($.07 per share diluted) from a change in estimates related to items included
in the 1998 special charge, and was reduced by $33 million after tax ($.07
per share diluted) for a combination of items including a write down of
Halliburton Company's investment in Bufete Industriale, S.A . de C.V. of $16
million after tax ($.04 per share diluted), merger related period costs, and
additional severance and facility closures not included in the 1998 merger
plan.
Financial results of each of Halliburton's three business segments,
particularly its Energy Services Group, were negatively impacted by sharply
lower worldwide levels of capital and operational expenditures by the
company's petroleum industry customers.
The Energy Services Group business segment's revenues were $1,681 million
in the 1999 second quarter, a 29 percent decline compared to the 1998 quarter.
The revenues decline of the company's largest business segment was the result
of a severe worldwide drop-off of oil and natural gas exploration and
development activity. Hardest hit was the United States where the 1999 second
quarter average rotary rig count fell 40 percent below the year ago level, and
in April 1999 reached an all-time low. The 1999 second quarter worldwide
rotary rig count fell 33 percent below the 1998 quarter. Largely as a result
of these geographic activity level differences, 27 percent of the segment's
1999 second quarter revenues were derived from United States business, down
from 32 percent a year earlier.
While the Energy Services Group's revenues were better than general market
indicators, such as the rotary rig count, the sharp decline of business
activity levels resulted in an excessive amount of under-utilized capacity
which, in turn, led to intensive price competition for the smaller amount of
available business. As a result, the Energy Services Group's operating income
declined to $49 million in the 1999 second quarter, down from $304 million a
year earlier.
The Engineering and Construction Group business segment had revenues of
$1,372 million in the 1999 second quarter, a five percent decline from the
1998 quarter. Slowing of business activity in forest products, mining and
minerals, manufacturing and the ammonia/fertilizers lines of business were
partially offset by growth of the government operations, maintenance and
logistics business. Revenues derived from international business increased to
68 percent of the segment's total in the 1999 second quarter, compared to
61 percent in last year's quarter. Operating income from the Engineering and
Construction Group in the 1999 second quarter was $64 million compared to
$74 million in the 1998 quarter. Excluding a settlement on a Middle East
construction project recognized in last year's second quarter, 1999 second
quarter operating income of $64 million and operating margin of 4.7 percent
was higher than last year.
The Dresser Equipment Group business segment's revenues for the
1999 second quarter were $617 million, operating income was $53 million and
its operating margin was 8.6 percent. Reduced business activity, particularly
by petroleum industry customers, impacted the lower financial results as
compared to a year ago.
Dick Cheney, Halliburton's chief executive officer, said, "The 1999 second
quarter was a tremendous challenge for Halliburton as industry conditions
reached historic lows. However, the benefits of our aggressive cost reduction
program and restructuring activities allowed us to remain profitable during
this most difficult period. Given the recent strengthening in crude oil and
natural gas prices, and in the United States rotary rig count, we remain
optimistic that we will see improved business opportunities in the second
half of 1999 and in the year 2000."
Halliburton Company, founded in 1919, is the world's largest provider of
products and services to the petroleum and energy industries. The company
serves its customers with a broad range of products and services through its
Energy Services Group, Engineering and Construction Group, and Dresser
Equipment Group business segments. The company's World Wide Web site can be
accessed at halliburton.com.
NOTE: In accordance with the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995, Halliburton Company cautions that
statements in this press release which are forward looking and which provide
other than historical information, involve risks and uncertainties that may
impact the company's actual results of operations. Please see Halliburton's
Form 10-Q for the quarter ended March 31, 1999 for a more complete discussion
of such risk factors.
HALLIBURTON COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Quarter Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
Millions of dollars except per share data
Revenues
Energy Services Group $ 1,681 $ 2,381 $ 3,434 $ 4,666
Engineering and
Construction Group 1,372 1,438 2,880 2,785
Dresser Equipment Group 617 766 1,280 1,389
Total revenues $ 3,670 $ 4,585 $ 7,594 $ 8,840
Operating income
Energy Services Group $ 49 $ 304 $ 106 $ 587
Engineering and
Construction Group 64 74 122 133
Dresser Equipment Group 53 77 107 116
Special charge credits 47 --- 47 ---
General corporate (17) (19) (34) (39)
Total operating income 196 436 348 797
Interest expense (34) (31) (70) (61)
Interest income 6 7 38 14
Foreign currency gains (losses), net 4 (2) 3 (2)
Other nonoperating, net (26) (1) (24) (1)
Income before income taxes,
minority interests and change
in accounting method 146 409 295 747
Provision for income taxes (53) (153) (113) (281)
Minority interest in net income
of subsidiaries (10) (13) (18) (20)
Income before accounting change 83 243 164 446
Cumulative effect of change in
accounting method, net --- --- (19) ---
Net income $ 83 $ 243 $ 145 $ 446
Basic income per share:
Before change in accounting
method $ 0.19 $ 0.55 $ 0.37 $ 1.02
Change in accounting method --- --- (0.04) ---
Net Income $ 0.19 $ 0.55 $ 0.33 $ 1.02
Diluted income per share:
Before change in accounting
method $ 0.19 $ 0.55 $ 0.37 $ 1.01
Change in accounting method --- --- (0.04) ---
Net Income $ 0.19 $ 0.55 $ 0.33 $ 1.01
Basic average common shares
outstanding 440 438 440 438
Diluted average common shares
outstanding 444 443 443 443
Prior year restated for the acquisition of Dresser Industries, Inc., which
has been accounted for as a pooling of interests.
SOURCE Halliburton Company
CO: Halliburton Company
ST: Texas
IN: OIL
SU: ERN
07/22/99 16:27 EDT prnewswire.com |
