Halliburton to report more losses on its financial statement
29 June 2004
WASHINGTON, June 29 (HalliburtonWatch.org) - Despite Halliburton's lucrative contracts with the Pentagon, it continues to mismanage its businesses, resulting in heavy losses on its financial statements. This was evident today when the company announced it will take a $200 million charge in the second quarter for losses incurred on its Barracuda-Caratinga project, located in Brazil. Investors and analysts were surprised by the announcement today because Halliburton claimed earlier in the year that the loss on the project would be much smaller and not exceed 14 cents per share. Barracuda-Caratinga is suffering from higher cost estimates, schedule delays and other contingencies that will amount to a 46 cents per share loss for the second quarter of 2004. Under the project, Halliburton's KBR subsidiary is converting two supertankers -- one named Barracuda, the other named Caratinga -- into production, storage and offloading vessels for deepwater oil fields. The project was awarded to KBR by Brazilian company Petroleo Brasileiro SA, also known as Petrobras. Halliburton also said it would take a $615 million after-tax charge in the second quarter in order to settle 400,000 asbestos and 21,000 silica lawsuits. The total value of the settlement is $4.17 billion in cash and stock. The loss amounts to $1.40 per share. Halliburton expects to collect $1.4 billion from insurance as part of the settlement, which was first announced in December 2002.