Weatherford Posts Drop in Profit for Third Quarter 2009
Weatherford reported third quarter 2009 income from continuing operations of $93 million, or $0.13 per diluted share, excluding an after tax loss of $0.02 for investigation and exit costs incurred in connection with the company's withdrawal from sanctioned countries and severance costs principally associated with restructuring activities.
Third quarter diluted earnings per share from continuing operations reflect a decrease of 76 percent over the third quarter of 2008 diluted earnings per share from continuing operations of $0.55, before severance and investigation costs. Results for the third quarter include a tax benefit of approximately $0.05 resulting from the lowering of the company's estimate of its effective tax rate, as well as a negative $0.02 impact from higher losses on foreign currency remeasurement and the settlement of a legal dispute. In addition, third quarter results include a gain of $27 million recorded pursuant to Statement of Financial Accounting Standards No. 141®, Business Combinations, in connection with the revaluation of contingent consideration associated with an acquisition. This financial item was mostly offset by other adjustments going both ways.
Third quarter revenues were $2,150 million, or 15 percent lower than the same period last year, against a backdrop of a 39 percent decrease in global rig count. North America was primarily responsible for the decline, with revenues decreasing 47 percent against a 52 percent decline in rig count. International revenues were up 12 percent against an 11 percent decrease in international rig count.
Sequentially, the company's third quarter diluted earnings per share from continuing operations, before severance and investigation costs, were $0.03 higher than the second quarter of 2009 diluted earnings per share from continuing operations of $0.10, before severance and investigation costs.
Revenues for the quarter were $620 million, which is a 47 percent decrease over the same quarter in the prior year, as compared to a 52 percent rig count decrease. Sequentially, revenues were up nine percent as compared to a 13 percent rig count increase.
Operating income was $33 million, which is down $280 million compared to the same quarter in the prior year and up $34 million sequentially. The sequential increase was mainly attributable to the seasonal recovery in Canada.
Middle East/North Africa/Asia
Third quarter revenues of $600 million were six percent lower than the third quarter of 2008 and one percent higher than the prior quarter. On a sequential basis, strong performances were posted in Saudi Arabia, Qatar, China and Australia.
The current quarter's operating income of $102 million decreased 30 percent as compared to the same quarter in the prior year and decreased 17 percent as compared to the prior quarter due to the combined impact of delayed project start ups and product deliveries, as well as lower pricing.
Third quarter revenues of $525 million were 67 percent higher than the third quarter of 2008 and 13 percent higher than the prior quarter despite weather issues and reduced gas activity in Mexico. On average, we operated 45 strings in Mexico, up from an average of 33 strings last quarter. Those rigs that were unaffected by weather ran more efficiently than the prior quarter. Fourteen of our strings operate in the central and northern part of the Chicontepec field which suffered from flooding during the current quarter.
The current quarter's operating income of $54 million declined 22 percent as compared to the same quarter in the prior year. Sequentially, operating income declined 37 percent due to pricing declines as well as the negative impact of fixed costs incurred on rigs made idle during the flooding in Mexico.
Third quarter revenues of $404 million were one percent lower than the third quarter of 2008 and 11 percent higher than the prior quarter. The sequential increase was driven primarily by our acquisition of TNK-BP's oilfield service business during the third quarter. This increase was offset by declines in activity in Europe.
The current quarter's operating income of $72 million declined 30 percent as compared to the same quarter in the prior year and increased 15 percent sequentially.
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