US: Halliburton sees earnings doubling in coming years

Oil field services company Halliburton Co. expects net income and earnings per share to double over the next three to five years, Chief Financial Officer Cris Gaut said today.

Those increases will be the result of the strongest demand for oil field services in years as well as acquisitions.

In a presentation to investors, Gaut forecast revenue growth for the energy services group of the company of 20 per cent per year or more over that time period.

Halliburton, the No 2 energy services company, has filed to spin off through an initial public offering 20 per cent of its engineering and construction unit KBR, the Pentagon's biggest private contractor in Iraq.

Gaut said the company would use the proceeds from the IPO, which could reach as high as $US550 million ($NZ890 million), to help fund its acquisition strategy.

Halliburton's oilfield services posted an 80 per cent rise in its 2005 operating profit to $US2.28 billion, on revenues of $US10.1 billion. Including KBR operations, revenues last year totaled $US21 billion and net profits were $US2.36 billion.

Halliburton will spend $US1 billion to $US2 billion a year on deals, Gaut said, to add technology, expand its geographic reach and make better use of its distribution network.

"It's an additive strategy, not a transformative strategy," Gaut said at the investor and analyst day, monitored via Web cast.

Earlier in the day, Chairman and Chief Executive Dave Lesar said the company had completed a turnaround, after years of being battered by asbestos liabilities and other issues.

"We are leaner, meaner, tougher and more focused than we've ever been," said Lesar, who succeeded US vice-president Dick Cheney as CEO. "We've got the best set of management we've ever had in this company." Halliburton and other energy services companies have benefited from the surging oil prices over the past two years, which have prompted energy producers to spend heavily to increase their output.

Shares in the company have risen more than 10 per cent this year, even including a 25 per cent drop from the all-time high close on April 20 of $US82.84. The broader Oil Service Index has gained 5.5 per cent year to date.

On Thursday, Halliburton shares were down 3 per cent or $US2.14 or $US68.12 per share on the New York Stock Exchange, faring better than the broader energy services sector decline of 3.8 per cent.

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