The fall of Halliburton?
Houston-based Halliburton, which to many had become synonymous with "contract abuse" after high-profile scandals in Iraq, may finally be taking a financial hit for its controversial dealings.
For years, the energy and military contracting company had seemed impervious as charges of cost-overruns, fraud, cronyism, and other misdeeds exploded with stunning regularity. But that may be changing.
First came the news that the Army is re-bidding the no-bid, no-cap contract (first exposed by the Institute in 2001) Halliburton had been given for “logistical support" in the war on terror.
Next, Halliburton’s widely-anticipated move to sell off its KBR subsidiary, responsible for most of the Iraq deals, fizzled, in part because of a project gone sour in Nigeria, the Wall Street Journal reports:
For years, the energy and military contracting company had seemed impervious as charges of cost-overruns, fraud, cronyism, and other misdeeds exploded with stunning regularity. But that may be changing.
First came the news that the Army is re-bidding the no-bid, no-cap contract (first exposed by the Institute in 2001) Halliburton had been given for “logistical support" in the war on terror.
Next, Halliburton’s widely-anticipated move to sell off its KBR subsidiary, responsible for most of the Iraq deals, fizzled, in part because of a project gone sour in Nigeria, the Wall Street Journal reports:
Halliburton Co., facing unexpected problems with the initial public offering of its Kellogg Brown & Root unit, says it will take steps to separate the unit in a tax-free spinoff to shareholders within nine months.The troubled news continued last week, when Halliburton announced Friday that it was carrying a 6-month operating loss of $41 million, causing Merril Lynch analysis to downgrade the company’s stock from “buy” to “neutral.”
The Houston-based company filed in April to sell 20% of its energy-construction and government-contracting unit through an IPO, hoping to capitalize on strong market interest for KBR, which dominates the fast-growing market to build liquefied-natural-gas plants.
But since then, the company says the IPO market has weakened and the unit faces a newly surfaced problem with cost overruns in a giant construction project on the Nigeria coast.
4 Comments:
chris kromm is a moron. $41 million is pocket change for halliburton. get a b-school education you liberal ignoramous.
chris kromm is a moron. $41 million is pocket change for halliburton. get a b-school education you liberal ignoramous.
Maybe 'anonymous' ought to get a b-school education, or or at least learn how to work a mouse without posting twice.
The KBR subsidy of Halliburton had a 3% decline in Q2 revenues as compared to Q2 2005, resulting in a $41 million loss v. a $111 million profit in Q2 2005, "primarily due to decreased military support activities in Iraq".
Investors don't like a losing division operating in a losing proposition at a loss. Didn't they teach you that in b-school?
Exactly!!!! Halliburton was losing money with their ventures in Iraq. Losing this contract is actually good for the bottom line.
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