HOUSTON -- Weatherford International said Tuesday it expects growth across the board for 2012 as the company tries to win over investors flummoxed by the oil services company's recent failure to meet profit expectations.
Despite Weatherford's revenue reaching new highs amid a boom in North American oil-and-gas development, the company's profit has lagged rivals because of accounting errors, charges and slow growth in its international operations. The Swiss-based oil services company has also been perceived as slow in moving its North American operations from natural gas fields, where growth is slowing, to more profitable oil fields.
"We remain constructive on North America, both top line (revenues) and margin," Weatherford Chief Executive Bernard J. Duroc-Danner said during a conference call with investors. "We know this is a minority view."
Weatherford expects revenue to rise 20% and operating income to double in its international segments the second half of the year as activity in China and Latin America ramp up. The company expects China to become the most active of its Asia-Pacific markets by 2013 as the country develops its oil and gas shale fields.
Weatherford also expects its Latin America business to increase as more heavy-oil production fields are developed, Duroc-Danner said. Argentina's move to nationalize oil production will not affect Weatherford's operations in the region, the CEO added.
But the company only described its second-quarter North American revenue as "flat to up" as it continues to move operations from natural gas fields, where activity is slowing, to more profitable oil fields.
In "a few instances we happen to be on plays that basically curtailed, shut down and they couldn't (move) fast enough for oil and liquid plays," Duroc-Danner said. "You'll find the numbers will turnaround in the second quarter."
The company in February detailed accounting errors that would adjust previously reported financial results for 2010 and earlier by roughly $225 million to $250 million. After the restatements, Weatherford named John H. Briscoe as its new chief financial officer to replace Andrew P. Becnel, and said James M. Hudgins, its vice president for tax matters, would leave the company at the end of March.
Weatherford on Monday said severance costs added $25 million in charges for the latest quarter, while ongoing investigations by the U.S. government added $2 million in costs. The company also booked $40 million of discrete tax items to reflect new estimates of its tax burden and uncertainty about its tax position.
Weatherford posted first-quarter net earnings of $123 million, or 16 cents a share, up from $37 million, or 5 cents, for the same period of 2011. Revenue jumped 26% to $3.6 billion, falling slightly short of the $3.64 billion expected by analysts polled by Thomson Reuters.
Weatherford shares were $14.18 in mid-morning trading, up 3.5 percent.
Copyright (c) 2012 Dow Jones & Company, Inc.
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