Haliburton Enjoys $15.3 Billion in Revenue for 2007
Halliburton reported that revenue was $15.3 billion for the full year 2007, an increase of 18% from the full year 2006, and operating income was $3.5 billion, an increase of 8% from the full year 2006. Income from continuing operations for the full year 2007 was $2.5 billion, or $2.66 per diluted share, compared to 2006 income from continuing operations of $2.2 billion, or $2.07 per diluted share. 2007 earnings per share were positively impacted by improved operating performance, a lower share count, and the favorable income tax impact from the ability to recognize United States foreign tax credits that were previously assumed not to be fully utilizable. Net income in 2007 was $3.5 billion, or $3.68 per diluted share, compared to 2006 net income of $2.3 billion, or $2.23 per diluted share. Income from discontinued operations in 2007 included a net gain of $933 million recorded for the separation of KBR, Inc.
Halliburton's consolidated revenue in the fourth quarter of 2007 was $4.2 billion, up 19% from the fourth quarter of 2006. This increase was attributable to increased worldwide activity, particularly in the Eastern Hemisphere.
Income from continuing operations in the fourth quarter of 2007 was $674 million, or $0.74 per diluted share, compared to $627 million, or $0.61 per diluted share, in the fourth quarter of 2006. The fourth quarter 2007 results were unfavorably impacted by a $22 million after-tax charge related to the impairment of an oil and gas property in Bangladesh, where the company has had an interest in a producing property since 1996, and $8 million of after-tax expenses associated with executive separation costs. The quarter was also favorably impacted by a lower tax rate as increased international profits allowed the company to recognize additional foreign tax credits. Net income for the fourth quarter of 2007 was $690 million, or $0.75 per diluted share. This compares to net income of $658 million, or $0.64 per diluted share, in the fourth quarter of 2006.
Consolidated operating income was $907 million in the fourth quarter of 2007 compared to $923 million in the fourth quarter of 2006. Fourth quarter of 2007 operating income included a $34 million impairment charge for the Bangladesh oil and gas property and $12 million for executive separation costs. Operating income in the fourth quarter of 2006 included a $48 million gain on the sale of lift boats in West Africa and the North Sea and a $38 million gain related to insurance proceeds for business interruptions resulting from the 2005 Gulf of Mexico hurricanes.
"I am very pleased with our performance in 2007," said Dave Lesar, chairman, president, and chief executive officer. "We are particularly pleased by our growth in the Eastern Hemisphere, where revenue increased 27% year-over-year, and operating income increased 26% year-over-year.
"Our revenue in the fourth quarter grew 6% sequentially, marked by strong activity in both hemispheres. Our Eastern Hemisphere business grew an impressive 12% sequentially from the third quarter. Eastern Hemisphere operating income was down 3% sequentially, impacted by the impairment charge for the Bangladesh oil and gas property, mobilization costs for new contracts in Africa, and an unfavorable product sales mix. These items resulted in lower fourth quarter operating margins but do not affect our overall outlook for the hemisphere. Fourth quarter Eastern Hemisphere operating margins were nearly 23%, excluding the impact of the oil and gas impairment charge. Looking forward, we are confident that our strategies and the supporting investments we are making in our drilling, evaluation, and completions product lines will drive Halliburton's continued international growth.
"Sequentially, Western Hemisphere revenue and operating income grew 2% and 3% respectively, driven by activity increases in Canada, the Gulf of Mexico, and Latin America. Our United States land fracturing business experienced the expected seasonal slowdown and continued pricing pressures. Pricing declines in fracturing were in the low- to mid-single digits in the fourth quarter, in line with what we anticipated. We have largely offset the seasonal slowdown and price declines by the growth in revenue and operating income of our other service offerings, with our directional drilling and drill bits businesses registering strong performance.
"Our international growth is providing the strength to offset the challenging North American market, with over 55% of our fourth quarter revenue now coming from outside of North America."