Weatherford Reports 66% Gain Over Previous Q2
Weatherford International Ltd. on Thursday reported second quarter 2006 net income of $188.6 million from continuing operations, or $0.53 per diluted share, before a non-recurring charge. Second quarter diluted earnings per share reflect an improvement of 66 percent over the second quarter of 2005 diluted earnings per share of $0.32. The non-recurring charge in the second quarter 2006 results includes severance of $1.8 million, net of tax, related to the integration of the Precision acquisition.
Second quarter revenues were $1,538.6 million, or 64 percent higher than the same period last year against a backdrop of a 14 percent increase in the rig activity.
Sequentially, the company's second quarter diluted earnings per share from continuing operations were slightly lower than the record first quarter 2006 diluted earnings per share of $0.57, due to the seasonal downturn in the Canadian market. The second quarter performance reflected worldwide gains outside of Canada across the breadth of the company's product and service offerings. Excluding the impact of the 42 percent Canadian seasonal decline, revenue improved $163 million, or 14 percent. The Eastern Hemisphere was the fastest growing region. Eastern Hemisphere's revenues increased 15 percent sequentially, as compared to a less than one percent rig count increase. The United States' revenues increased 14 percent sequentially, or nearly twice that of the regional rig count improvement. Latin American revenues increased 10 percent sequentially, as compared to a 5 percent rig count increase.
In the first six months of 2006, revenues were $3.1 billion and income from continuing operations before charges was $392.0 million, or $1.09 per diluted share. In 2005, the company reported revenues for the first six months of $1.8 billion, and income from continuing operations before charges of $181.2 million, or $0.61 per diluted share.
Evaluation, Drilling & Intervention Services
Revenues for the quarter were $965.5 million, an 88-percent increase above the prior year period and a 4 percent decline from the prior quarter. Geographically, all regions excluding Canada posted sequential revenue improvements. Middle East/North Africa led with 19 percent sequential growth. From a product line perspective, all product lines exceeded prior quarter revenue levels excluding the seasonal impact of Canada.
Operating income of $241.0 million was 97 percent higher than the same quarter in the prior year and 11 percent lower than the preceding quarter. The sequential decline was attributable to the lower contribution from Canada, which was offset in part by the improvements in the Middle East, Europe, West Africa and the United States.
Completion & Production Systems
Second quarter revenues of $573.1 million were 35 percent higher than the second quarter of 2005 and 8 percent higher than the prior quarter. Geographically, all regions, excluding Canada, posted sequential improvements of 15 percent or greater. Middle East/North Africa and Latin America led the improvements; each with a 31 percent increase. This division's performance reflected improvements in its expandables, electrical submersible pumps, production optimization and stimulation product lines.
The current quarter's operating income of $115.9 million improved 105 percent as compared to the same quarter in the prior year and 26 percent as compared to the first quarter of 2006.
During the second quarter, the company recorded a loss of $11.4 million of Other, Net, which was primarily a foreign currency book loss.
Reclassifications and Non-GAAP
Reclassifications have been made to the company's segments due to a change in organizational structure. All prior periods have been restated to conform to 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.
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 30,200 people worldwide.
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