Halliburton Co., embroiled in controversy over its work for the U.S. government in Iraq, on Friday posted a quarterly loss due to charges from a troubled deep-water oil project and asbestos litigation.
The oil field services company said the charges offset gains from government contract work and robust drilling activity.
The Houston-based company posted a second-quarter net loss of $663 million, or $1.51 per share, compared with net income of $26 million, or 6 cents, a year earlier.
The loss included a charge of $609 million, or $1.39 a share, related to lower-than-expected insurance recoveries to help fund a proposed settlement of asbestos and silica class-action litigation.
Excluding discontinued operations, the company lost $54 million, or 12 cents a share, in the quarter, including a charge of $200 million, or 46 cents a share, for problems related to the troubled Barracuda-Caratinga deep-water oil project in Brazil.
Excluding the asbestos-related and Brazil charges, the company posted a profit of 34 cents a share, a penny better that an average forecast of 33 analysts polled by Reuters Estimates.
Halliburton shares slipped 16 cents, or 0.5 percent, to $30.88 in early trade on the New York Stock Exchange.
Second-quarter revenue rose 38 percent to $5.0 billion. Iraq-related work contributed $1.7 billion in revenue but added just $23 million to operating income.
The company, formerly headed by U.S. Vice President Richard Cheney, has been embroiled in controversy over its work in Iraq, where its KBR unit is the biggest contractor.
The U.S. Justice Department is investigating a possible $61 million in fuel-delivery overcharges by KBR, and the military has withheld hundreds of millions of dollars in payments for meal services while it reviews the company's bills.
Halliburton on Friday named Andrew Lane, 45, as president and chief executive officer of KBR. He succeeds Randy Harl, 53, who will become chairman. Lane was senior vice president of Halliburton Energy Services Group's regional organization and previously was president and CEO of Landmark Graphics.
Halliburton's primary business, oil field services, reported higher operating income in all segments in the second quarter. Revenue rose 7 percent to $1.9 billion and operating income rose 15 percent to $271 million.
KBR revenue rose 68 percent to $3.1 billion, driven by Middle East contract work. The division posted a $277 million loss, reflecting a $310 million loss on the Brazil project.
Halliburton said KBR's backlog of work was $8.8 billion at the end of June, up $400 million during the quarter, mostly due to its logistical support contract work.
