HOUSTON (AP) _ An unexpected charge on a troublesome project off the coast of Brazil pushed Halliburton Co. to a $663 million net loss in the second quarter, the company announced Friday.
The net loss, which amounted to $1.51 per share, also included a charge of $609 million, or $1.39 per share, related to the Houston-based oil services conglomerate's pending $4.17 billion cash and stock settlement of 400,000 asbestos and 21,000 silica claims. Halliburton reported net income of $26 million, or 6 cents per share, in the second quarter of 2003.
Last month the Houston-based oil services conglomerate said it would take a $200 million, 46 cent per share after-tax charge on the Brazil project, pushing after-tax charges on the $2.5 billion project to about $500 million since 2000.
The company blamed the charge for its second-quarter loss from continuing operations of $54 million, or 12 cents per share, compared with earnings of $42 million, or 9 cents per share, in the year-ago period.
Analysts surveyed by Thomson First Call expected earnings of 33 cents per share.
The losses came despite revenues of $4.96 billion, up 38 percent from year-ago revenues of $3.60 billion. Halliburton said the increase in revenues was ``largely attributable'' to its KBR subsidiary's government contracts in the Middle East. Congress is investigating allegations that Halliburton overcharged the government on contracts related to the U.S.-led invasion of Iraq, and the company denies any wrongdoing.
Halliburton shares fell 16 cents to $30.88 in morning trading on the New York Stock Exchange.
The charge on the Brazil project emerged upon a detailed review that revealed higher cost estimates, schedule delays and other contingencies that Halliburton hadn't anticipated. The project involves conversion of two supertankers into production, storage and offloading vessels for deepwater oil fields.
However, Halliburton said earlier this year it didn't expect any charges beyond a $62 million, or 14 cents per share, charge taken on the project in the first quarter.
In April, Halliburton announced an agreement in principle with the customer, Brazil's Petroleo Brasileiro SA, or Petrobras, to settle outstanding claims and extend project deadlines. KBR and Petrobas are continuing efforts to finalize that agreement, and the charge included in second-quarter results assumes those efforts will be successful.
Also Friday, Halliburton announced that Andrew Lane, senior vice president of the regional organization of the company's energy services group, had been named president and chief executive officer of KBR. Lane succeeds Randy Harl, who will become KBR's chairman.