Oilfield services provider Halliburton Co. posted stronger-than-expected fourth-quarter earnings Monday but said lower energy prices will mean diminished spending on production and exploration this year.

The company also said it has agreed to pay $559 million to settle corruption charges with the U.S. government linked to its former subsidiary KBR Inc.

As a result of that potential settlement, Halliburton incurred a one-time charge of $303 million, or 34 cents a share, in the most-recent quarter, contributing to a 32 percent reduction in year-over-year profit.

Halliburton, which has corporate headquarters in Houston and Dubai, said its net income in the October-December period fell to $468 million, or 53 cents per share, compared with $690 million, or 75 cents a share, during the same period a year ago.

The charge aside, income from continuing operations amounted to $776 million, or 87 cents a share, versus $674 million, or 74 cents a share, a year ago. Excluding other one-time items, fourth-quarter profit amounted to 82 cents a share, 9 cents better than the consensus Wall Street forecast, according to analysts at securities firm Tudor Pickering Holt & Co.

Halliburton's quarterly revenue rose 17 percent to $4.91 billion from $4.18 billion in the previous year, topping analysts' estimates of $4.82 billion.

Its share price rose 3.4 percent, or 62 cents, to close at $18.87. The shares have traded in the range of $12.80 to $55.38 in the past year.

In a conference call with analysts, Halliburton executives said the company continues to benefit from the expansion of its international business, which grew 22 percent last year.

But they acknowledged that 2009 was likely to be a tough year for the company and industry, as lower crude prices, frozen credit markets and forecasts for puny energy consumption force oil and gas producers to scale back spending. That reduces work for companies like Halliburton, which assists producers with drilling, reservoir management and other services.

After peaking above $147 in July, crude prices fell steadily for the remainder of 2008, drastically reducing oil-patch activity.

Chairman and chief executive Dave Lesar said he expects customers to cancel some exploration and production projects, delay others and ask for discounts on existing work.

As such, Lesar said, Halliburton will cut some spending and eliminate jobs in markets particularly hard hit by the downturn. The company didn't provide specifics. Its larger rival, Schlumberger Ltd., said last week it will cut up to 5,000 jobs worldwide in the first half of 2009 and consider further reductions this spring. Its fourth-quarter profit fell 17 percent.

At least for now, Halliburton plans to keep its own 2009 capital spending budget at last year's levels.

"We've been through the cycles before, we know what to do and we'll execute on that experience," Lesar said.

Companies across the oil and gas sector — producers, service providers, drillers and others — are expected to post mostly lower results for the final three months of 2008 because of the collapse of oil prices. The major oil companies are scheduled to report earnings later this week, beginning with ConocoPhillips on Wednesday.

Nearly two years after its split with KBR, Halliburton continues to deal with matters related to the Houston-based military contractor and engineering company.

Last September, former KBR chief executive Albert "Jack" Stanley pleaded guilty to conspiring in a decade-long scheme to bribe Nigerian government officials in return for engineering and construction contracts. Stanley acknowledged in his plea that a four-company joint venture including KBR paid about $182 million to consulting companies that then paid bribes to several Nigerian government officials.

As part of its potential settlement with the U.S. government, Halliburton said it has agreed to pay $382 million on KBR's behalf over the next two years to the Justice Department, and $177 million to the Securities and Exchange Commission.

Halliburton said the settlement is currently under review by federal officials.

For all of 2008, Halliburton reported net income of $1.54 billion, or $1.70 a share, versus $3.5 billion, or $3.68 a share, in the year-earlier period. The most-recent results were negatively affected by charges related to its separation from KBR. Full-year revenue rose nearly 20 percent to $18.3 billion.