Halliburton drops 11% on slowdown news
Thursday, October 26th 2000, 12:00 am
By: News On 6
By Terry Maxon / The Dallas Morning News
Shares in Halliburton Co. dropped nearly 11 percent Wednesday as investors reacted to news that the company saw poor results from its engineering and construction group.
Dallas-based Halliburton disclosed Tuesday after the market closed that it planned to restructure and probably shrink its engineering and constructions units â€“ Kellogg Brown & Root and Brown & Root Services, both part of its engineering and construction group, and its Brown & Root Energy Services unit.
Industry analyst Jim Wicklund with Dain Rauscher Wessel in Dallas said Halliburton caught analysts by surprise when it detailed the depth of the slowdown in orders for new construction projects, particularly for customers in the energy and chemical industries.
"While it comes as no real surprise that offshore construction and refinery and process engineering and construction are weak," nobody expected the depth of the problems, Mr. Wicklund said, "with no near-term recovery in sight."
Mr. Wicklund was among several analysts who cut their earnings estimates for the fourth quarter and 2001 for the Dallas-based company.
Other analysts downgraded their recommendations on Halliburton stock.
Halliburton shares closed Wednesday at $37.06, down $4.56 in New York Stock Exchange trading.
At one point during the day, its shares dropped to $34.25, off nearly 18 percent from Tuesday's close.
Halliburton shares had traded as high as $55.69 in early September.
Trading volume jumped to 25.3 million shares, compared with an average day, when less than 3 million shares change hands.
Halliburton's problems also hurt similar companies, such as Fluor Corp., a major construction and engineering company, whose shares lost 5 percent to close at $33.13, down $1.75.
The Philadelphia Stock Exchange's Oil Services Index fell 4.5 percent on the day.
But Wednesday was a down day for a lot of oil and gas companies as well.
Crude oil prices have fallen slightly in recent days.