The New Morality

You may have seen the New York Times story about the problems supplying and staffing Marines in Iraq:

The unit had less than half the troops who are now doing its job in Ramadi, and resorted to making dummy marines from cardboard cutouts and camouflage shirts to place in observation posts on the highway when it ran out of men. During one of its deadliest firefights, it came up short on both vehicles and troops. Marines who were stranded at their camp tried in vain to hot-wire a dump truck to help rescue their falling brothers. That day, 10 men in the unit died.

But at least the White House has some good news about its primary mission.

NEW YORK, April 25 (newratings.com) - Analyst Robin Shoemaker of Bear Stearns maintains his "outperform" rating on Halliburton (HAL.NYS), while raising his estimates for the company. The target price has been raised from $50 to $55.

In a research note published this morning, the analyst mentions that the company's near term earnings are expected to be positively impacted by a reduced corporate tax rate of 32% during 2005. According to the analyst, Halliburton is receiving higher-than-expected award fees for the military support contract in Iraq. The EPS estimates for 2005 and 2006 have been raised from $2.15 to $2.30 and from $2.60 to $2.70, respectively.

I believe "higher-than-expected award fees" is financial-analyst-speak for the $212 million in overcharges revealed in Pentagon audits.

Halliburton, the Houston-based oil services company, may have overcharged the US government by $212m (£113m, €165m) for work in Iraq, according to portions of Pentagon audits released yesterday.

KBR, a subsidiary of Halliburton formerly run by Vice-President Dick Cheney, came under fire last year following allegations that it had overcharged the government $62m in "unreasonable costs" for importing fuel from Kuwait to Iraq.