Weatherford reports Q4 results

Weatherford International Ltd has reported Q4 2009 income from continuing operations of US$ 15 million, or US$ 0.02 per diluted share, excluding an after tax loss of US$ 0.06 for investigation and exit costs incurred in connection with the company’s withdrawal from sanctioned countries, severance costs principally associated with restructuring activities and a tax provision related to a legal entity reorganisation. Q4 diluted earnings per share from continuing operations reflect a decrease of 96% over Q4 2008 diluted earnings per share from continuing operations of US$ 0.53, before severance and investigation costs.

 Q4 results include the following items:

• US$ 21 million in inventory reserves and write-offs.

• US$ 12 million in expenses associated with business process and supply chain improvement projects, which will be ongoing for the next nine quarters.

• An US$ 8 million legal charge regarding settlement of a multi-year dispute.

• US$ 4 million of expenses incurred in connection with the completion of the company’s global tax reorganisation during the fourth quarter.

• A US$ 3 million net gain on acquisition and divestiture activities.

Q4 revenues were US$ 2426 million, or 8% lower than the same period last year, against a backdrop of a 29% decrease in global rig count. North America was primarily responsible for the decline, with revenues decreasing 37% against a 40% decline in rig count. International revenues were up 16% against an 8% decrease in international rig count. Sequentially, the company’s Q4 diluted earnings per share from continuing operations, before severance, reorganisation and investigation costs, were US$ 0.11 lower than Q3 2009 diluted earnings per share from continuing operations of US$ 0.13, before severance and investigation costs.

For the year ended 31 December 2009, revenues were US$ 8.8 billion, 8% lower than 2008, and income from continuing operations before severance, reorganisation and investigation costs was US$ 364 million, or US$ 0.50 per diluted share, a decrease of 75% from 2008. In 2008, the company reported revenues for the year of US$ 9.6 billion and income from continuing operations of US$ 1399 million, or US$ 2.00 per diluted share, before nonrecurring items. The nonrecurring items during 2008 were primarily for investigation and exit costs incurred in connection with the company’s withdrawal from sanctioned countries, which were partially offset by a gain on the restructuring of a Qatar operation into a JV.

North America

Revenues for the quarter were US$ 736 million, which is a 37% decrease over the same quarter in the prior year, as compared to a 40% rig count decrease. Sequentially, revenues were up 19% in line with a 20% rig count increase. All product lines showed sequential growth with the exception of pipeline. Operating income was US$ 42 million, which is down US$ 255 million compared to the same quarter in the prior year and up US$ 8 million sequentially.

Middle East/North Africa/Asia

Q4 revenues of US$ 593 million were 12% lower than the Q4 2008 and 1% lower than the prior quarter. On a sequential basis, strong performances were posted in Iraq, Malaysia and China offset by weakness in Saudi Arabia, Qatar, Oman, Libya, Egypt, Indonesia and Australia. The current quarter’s operating income of US$ 82 million decreased 49% as compared to the same quarter in the prior year and decreased 19% as compared to the prior quarter due to the continued impact of significant startup and delay costs in several countries.

Latin America

Q4 revenues of US$ 618 million were 59% higher than the Q4 of 2008 and 18% higher than the prior quarter. Mexico, Brazil, Columbia and Ecuador posted strong improvements sequentially. The current quarter’s operating income of US$ 49 million declined 44% as compared to the same quarter in the prior year. Sequentially, operating income declined 9% as decreased activity in natural gas projects in Mexico prevented adequate fixed cost absorption.

Europe/West Africa/FSU

Q4 revenues of US$ 478 million were 22% higher than the Q4 of 2008 and 18% higher than the prior quarter. The sequential increase was driven by a full quarter of the acquisition of TNK-BP’s oilfield service business and improvements in Norway, Romania, Angola and Nigeria. The current quarter’s operating income of US$ 43 million declined 52% as compared to the same quarter in the prior year and decreased 41% sequentially. 

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/26012010/weatherford_international_results/