Weatherford Reports 1Q06 Results of $0.57 Per Diluted Share
Weatherford International reported first quarter 2006 net income of $203.3 million from continuing operations or $0.57 per diluted share. First quarter diluted earnings per share from continuing operations improved 24 percent over fourth quarter 2005 diluted earnings per share of $0.46 excluding the gain on sale of Universal common stock and exit and restructuring charges associated with the Precision acquisition.
Revenues for the first quarter were $1,536.0 million and represented a 79 percent increase over the $857.7 million reported last year. Operating income was $307.4 million for the quarter, nearly 2.5 times 2005 first quarter operating income before charges. First quarter diluted earnings per share from continuing operations of $0.57 increased 97 percent from first quarter 2005 diluted earnings per share of $0.29 before charges.
On a sequential basis, first quarter revenues improved 5 percent above the record levels posted in the fourth quarter of 2005. Revenues increased 12 percent in North America doubling the 6 percent sequential improvement in rig count. The strong performance in this region more than offset a slight decline in Eastern Hemisphere revenues.
The company's first quarter operating income reached record levels as it increased 25 percent sequentially, and company-wide margins improved 320 basis points. Incremental operating margins were 82 percent. All divisions posted improvements in profitability. The strong increase in profitability was the combined result of better absorption, product mix and pricing improvements.
Evaluation, Drilling & Intervention Services
Revenues for the quarter were $916.7 million, 9 percent above the prior quarter and 96 percent above the same quarter in the prior year. Geographically, all regions excluding Asia Pacific, posted sequential revenue improvements. Canada reported the highest increase at 25 percent, followed by Latin America and the U.S. improving 13 percent and 7 percent, respectively.
Operating income of $257.1 million was 135 percent higher than the same quarter in the prior year and 23 percent higher than the preceding quarter. Incremental operating margins were 62 percent. Activity increases in North America and a strong performance by all of the divisional product lines contributed to the very strong incremental margins.
First quarter revenues of $510.0 million were 37 percent higher than the first quarter of 2005 and slightly lower than the prior quarter. Canadian and U.S. revenues improved 13 percent and 5 percent over the prior quarter, respectively. Revenues in the Eastern Hemisphere declined slightly from previous highs due to lower sales in Russia and West Africa.
The current quarter's operating income of $88.9 million improved 73 percent as compared to the same quarter in the prior year and 3 percent as compared to the fourth quarter of 2005. Productivity gains resulted in operating income margin improvements of 80 basis points sequentially and 350 basis points over the same quarter in the prior year.
Other Operations includes the company's pipeline services and contract drilling businesses. Sequential revenues and operating income in the first quarter improved 4 percent and 292 percent respectively.
Reclassifications and Non-GAAP
Reclassifications have been made to the company's reporting of certain
expenses. All prior periods have been restated to conform with the current
presentation and are included for reference. In addition, Non-GAAP
performance measures and corresponding reconciliations to GAAP financial
measures have been provided for meaningful comparisons between current results
and results in prior operating periods.
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