Weatherford reports second quarter results
Posted: 21 July 2003
Weatherford International Ltd reported 2003 second quarter revenues
of $617.7 million and net income of $39.0 million, or $0.31 per
diluted share, before non-recurring charges.
Non-recurring items affecting the quarter were after-tax charges
of $10.2 million, or $0.08 per share, primarily related to severance
and Weatherford’s percentage of Universal Compression Holdings,
Inc. debt restructuring charge.
Including the charges, net income for the quarter was $28.8 million,
or $0.23 per diluted share.
In the second quarter of 2002, revenues and net income were $593.9
million and $38.9 million ($0.31 per diluted share), respectively.
In the first six months of 2003, revenues were $1.2 billion and
net income, excluding the severance and debt restructuring charges,
was $72.6 million, or $0.57 per diluted share.
In 2002, reported revenues for the first six months were $1.2 billion
and net income was $84.1 million, or $0.66 per diluted share.
On a sequential basis, second quarter revenues and earnings per
diluted share, excluding the charges, increased 5 percent and 15
percent above the first quarter of 2003, respectively. The sequential
revenue increase reflects higher activity levels throughout the
Eastern Hemisphere and Latin America.
Non-North American revenues had sequential revenue gains of 10
percent, versus a 3 percent rig count increase. All regions contributed
to the growth with the most significant improvements occurring in
the Latin American and Asia Pacific regions. Despite a 12 percent
North American rig count decline, revenues were flat sequentially
as the 7 percent revenue increase in the United States offset Canada’s
seasonal revenue decline of 13 percent.
Drilling Services
Revenues of $362.0 million in the second quarter were 5 percent
above the level of the first quarter of 2003. Operating income of
$65.7 million was 2 percent higher on the same sequential basis.
Sequentially strong revenue and operating income growth in the
Eastern Hemisphere and Latin America was offset by the impact of
spring break up in Canada.
The seasonal decline was more severe than expected and was associated
with higher repair and maintenance expenses.
Production Systems
Second quarter revenues of $255.7 million were 5 percent higher
on a sequential basis. Strong revenue performances in Latin America,
Asia Pacific and the United States were offset primarily by the
seasonal impact of Canada.
A sequential operating profit decline of 7 percent reflected the
negative impact of the cost structure reduction process underway.
The Production Systems division bears the brunt of the cost reduction
change. The other factor contributing to a decline in operating
profit was a shift in product mix.
The Company’s Research and Development expenditures were
$22 million, or 11 percent above the prior quarter due to the non-linear
nature of project expenses. Other Income was $5.6 million, primarily
due to currency gains in the current quarter.
Conference Call
The Company will host a conference call with financial analysts
to discuss the second quarter and year-to-date 2003 results on July
21, 2003, at 9:00 a.m. (CST).
The Company invites investors to listen to a play back of the conference
call at the Company’s website, www.weatherford.com
in the “investor relations” section.
Further, the “investor relations/financial information”
section of the Company’s website includes a disclosure and
reconciliation of non-GAAP financial measures that may be used periodically
by management when discussing the Company’s financial results
with investors and analysts.
Weatherford is one of the largest global providers of innovative
mechanical solutions, technology and services for the drilling and
production sectors of the oil and gas industry.
Weatherford operates in over 100 countries and employs approximately
16,000 people worldwide.
Posted by Richard Price,
Editor Pipeline Magazine
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