Halliburton said earnings fell to $206 million, or 23 cents a share, from $378 million, or 42 cents a share, in the year-ago period.

The oil service giant’s adjusted net income totaled 28 cents a share in the latest period.

Revenue rose to $3.8 billion from $3.7 billion.

Wall Street analysts expected earnings of 26 cents a share, according to a survey by FactSet Research.

Shares of Halliburton rose 0.3% to $31.73, despite weakness in the energy sector.

S&P Equity Research increased its price target for Halliburton to $35 a share from $33 and reiterated its hold rating on the stock.

“Results were led mainly by strong North America activity, which was helped by demand in unconventional plays,” S&P Equity said in a note to clients. “We think that Halliburton can generate better margins on the international front, where margins were lackluster in the first quarter, as we believe its strategy to maintain its cost base in several markets, while waiting for projects to start, will eventually bear fruit.”

Halliburton said natural-gas fundamentals in North America remain a risk to continued rig-count growth in the near-term.

“We believe a sustainable recovery will only occur with an increase in natural-gas demand,” the company said.

Consolidated operating income rose to $449 million from $428 million.

Halliburton said the recent devaluation of the Venezuelan Bolivar Fuerte resulted in a charge of $31 million, or 4 cents a share, and $10 million, or a penny a share, of additional income tax expense.

Halliburton said the Latin America region posted disappointing results, due to further deterioration of activity in Mexico.

“Tangible indications are that, barring any major economic disruption, the industry is likely to experience a steady resurgence in international activity in the second half of the year and into 2011,” the company said.

The company said it expects better margins in North America in the second quarter. Overseas, Halliburton officials said customers are more confident about starting up big projects now that oil prices are well above year-ago levels.

Halliburton officials also said they’re seeing strong demand in the U.S. from shale plays in the Bakken, Haynesville and Eagle Ford formations.

Halliburton also expects plenty of oil service business in Iraq, with more contract approvals expected by the summer.
Steve Gelsi is a reporter for MarketWatch in New York.

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