Economy breaking news and pictures

HOUSTON (AP) — Halliburton's net income for the fourth quarter fell 26 percent because of a decline in North America, where drilling activity slowed and the company has been forced to charge lower prices for its services.

Still, the results beat Wall Street expectations and shares rose 5 percent. The world's second-largest oilfield services company earned $669 million, or 72 cents per share, for the three months ended Dec. 31. That's down from $906 million, or 98 cents per share, a year ago. But excluding one-time items, earnings were 67 cents per share, 6 cents above the forecast of analysts surveyed by FactSet.

Halliburton is a major provider of the pressure-pumping technique known as hydraulic fracturing, or "fracking," which has enable drilling companies to unlock vast supplies oil and natural gas from underground shale deposits in the U.S. Natural gas production in the U.S. rose by about 20 percent between 2007 and 2011, according to the Energy Department. Halliburton's revenue rose more than 60 percent in that same period.

But now supplies of gas are plentiful and the price has dropped sharply. Natural gas futures prices averaged about $2.83 per 1,000 cubic feet in 2012, down from $4.03 in 2011. The number of rigs drilling for natural gas has fallen off, and some of Halliburton's pressure-pumping equipment is sitting idle, although a boom in oil drilling in North Dakota and Texas has offset some of the slump in the natural gas business.

Halliburton's North American operating income fell 58 percent. Schlumberger, the world's biggest oilfield services company, was able to offset the decline in drilling on land with increased revenue in the Gulf of Mexico. In addition, Schlumberger has bigger operations overseas.

While Halliburton had traditionally kept its focus closer to home, it is looking increasingly abroad. And it's expertise in the epicenter of hydraulic fracturing could give the company cache in countries desperate to use the same technology to ease their energy dependence.

During the fourth quarter, revenue rose in Latin American, Europe, Africa, the Middle East and Asia. Overall revenue increased 3 percent in the quarter to $7.29 billion from $7.06 billion. Halliburton said the quarterly revenue performance was the highest in its history.

Halliburton's stock rose $1.91, or 5 percent, to close at $39.72 Friday. "The company's international growth strategy continued to benefit the top and bottom lines," said Scott Gruber, an analyst with Bernstein Research. "In fact, following spectacular 20 percent (year-over-year) revenue growth abroad and 39 percent income growth, Halliburton generated 57 percent of its income abroad."

While the final quarter of the year was exceptionally slow, company officials indicate the environment in North America will remain subdued this year. "In 2013, we anticipate the North America rig count will improve from fourth quarter levels but will be down slightly compared to 2012," said Chairman and CEO Dave Lesar in a statement.

For the year, the Houston company earned $2.64 billion, or $2.84 per share. In the prior year it earned $2.84 billion, or $3.08 per share. Earnings from continuing operations were $2.78 per share. Annual revenue rose 15 percent to $28.5 billion from $24.83 billion.