Halliburton profit slides

By Braden Reddall

SAN FRANCISCO (Reuters) - Halliburton (HAL.N) posted a higher-than-expected profit on Monday, lifting its shares, but the world's second-largest oil services company warned that North American natural gas markets would stay weak throughout 2009.

Natural gas prices in the United States have tumbled to less than half of year-ago levels, and the industry expects high inventories to curb spending by producers on new wells.

"It seems that in North America, there's no place to hide," said Bernard Duroc-Danner, chief executive of rival Weatherford International Ltd (WFT.N), which posted a steeper-than-expected second-quarter profit drop on Monday. "Pricing was under severe pressure just about everywhere I could think of."

The sharp decline in oil and gas prices over the past year has forced exploration and production companies to reel in spending across the board, putting a tight squeeze on pricing power among companies selling them services.

Halliburton said margins in the international market, which tends to react more slowly to hydrocarbon pricing trends, would shrink by 3 to 5 percentage points by the end of 2010.

Halliburton's second-quarter net profit fell to $262 million, or 29 cents per share, from $504 million, or 55 cents per share, a year earlier.

Excluding a $12 million charge to cut jobs, Halliburton posted earnings per share of 30 cents, topping the analysts' average forecast of 26 cents, according to Reuters Estimates.

Revenue dropped to $3.49 billion from $4.49 billion, while analysts had expected $3.41 billion.