Taking Advantage Of Halliburton's Earnings (HAL, SLB, BHI, WFT, NOV)

Halliburton Co. (NYSE: HAL) reported better than expected earnings today, beating both top and bottom line estimates, yet shares are down. Why?

Haliburton reported fourth quarter earnings today of 68 cents on revenues of $5.16 billion. Wall Street estimates were 63 cents per share on $4.87 billion in revenues.

As crude oil prices rose, Halliburton and its subsidiaries continued to see higher demand for its products and services.

“To have strong earnings growth in North America despite what is going on in the Gulf of Mexico is positive,” said Brian Youngberg, an analyst at Edward Jones in St. Louis, who rates the shares a “hold” and owns none.

“We continue to believe that prospects for a recovery in the Gulf of Mexico will remain uncertain through the first half of 2011 and perhaps the full year,” Chief Executive Officer Dave Lesar said in the statement.

Despite the strong earnings report, shares are down on the back of lower oil prices today. This could be a buying opportunity depending on the time frame the investor has. At last check, oil was down $1.31 per barrel to $87.80. If you believe that oil West Texas Intermediate oil prices will move towards $100 per barrel this year as most believe, then picking up shares on the cheap of Halliburton, or its competitors like Schlumberger Limited. (NYSE: SLB), Baker Hughes Incorporated (NYSE: BHI), Weatherford International Ltd. (NYSE: WFT) and National Oilwell Varco, Inc. (NYSE: NOV) would be a wise investment.

We're seeing a pullback in oil, and I believe we will continue to see it over the next couple of weeks, which makes Halliburton and its competitors potential stalking candidates.

Disclosure: no position in names mentioned

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