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Cheney gets 'A' as CEO
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July 25, 2000: 3:10 p.m. ET
VP pick credited with Halliburton's revival; company future seen as secure
By Staff Writer Chris Isidore
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NEW YORK (CNNfn) - Not many a chairman or chief executive would give up his job for a chance to become a vice president, but Halliburton chief Dick Cheney is poised to take that gamble.
Of course, Cheney is leaving the company he has led since 1995 for a chance to be vice president of a little operation known as the United States government. The former Wyoming congressman and secretary of defense joined the Republican national ticket as Texas Gov. George Bush's running mate Tuesday afternoon.
 He leaves behind a company in far better position than the one he joined in October 1995, according to analysts, and one which most believe should see a smooth transition to his own number two, Dave Lesar, Halliburton's president and chief financial officer since 1997. Lesar was named to the top position at Halliburton's with Cheney's departure.
Halliburton (HAL: Research, Estimates) is the world's second leading oil services firm, providing engineering, drilling and other support to the oil industry. The company was much probably closer to number five in the industry when Cheney took over in 1995, and was laboring as a second tier company, in terms of technology, according to analyst James Wicklund of Dain Rauscher Wessels.
"There were a lot of people at Halliburton who knew oil service business. That wasn't what they needed. They needed a strong decision maker, and that's what Cheney was," said Wicklund.
The main move that Cheney and Lesar helped engineer was the merger with Dresser Industries Inc., in 1998, virtually doubling the size of the company, and helping it to improve efficiency. The stock-swap deal was valued at $7.7 billion, which now appears to be a bargain, Wicklund said, with the combined companies now having a market capitalization of $18.8 billion.
Cheney was chief executive of the combined company, but for the first year after the closing of the deal Dresser Chairman William Bradford served as chairman of the combined company.
 "Cheney had no problem letting Bradford be first chairman; he didn't let his ego get in the way of a very strategic and smart business combination," said Wicklund. "Egos are what screw up most combinations in my sector. Having an ego that is in check is probably a good idea for a vice president, too."
Still, Wicklund and other analysts say they don't believe that the company will suffer from Cheney's departure.
"Halliburton's product and services, down at the operating level, are among the best in the business," said Stephen Gengaro, analyst with ING Barings. "He leaves it in a better position than when he began his career there."
The company is due to release second quarter results Wednesday after the market closes. Analysts surveyed by First Call forecast earnings will slip to 16 cents a share from 19 cents a share a year ago. But annual earnings are expected to rise to 82 cents a share from 67 cents a share it posted in 1999.
"Oil services firms really can't control revenues. We look for margin improvement," said Wicklund.
Others say that Lesar already was more responsible for day-to-day company operations than Cheney, and he should have no problem assuming broader duties.
"I don't think having your former chairman become vice president is going to hurt your company, if that were to come to be," said Vince Farrell, chairman and chief investment officer of Spears, Benzak, Salomon and Farrell, in an interview on CNNfn's Ahead of the Curve program Tuesday. "So I don't think Halliburton is affected one way or the other by this." (236KB WAV) (236KB AIFF) 
-- Click here to send e-mail to Chris Isidore
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