Weatherford Reports Fourth Quarter Results
Weatherford reported fourth quarter 2009 income from continuing operations of $15 million, or $0.02 per diluted share, excluding an after tax loss of $0.06 for investigation and exit costs incurred in connection with the company's withdrawal from sanctioned countries, severance costs principally associated with restructuring activities and a tax provision related to a legal entity reorganization. Fourth quarter diluted earnings per share from continuing operations reflect a decrease of 96 percent over the fourth quarter of 2008 diluted earnings per share from continuing operations of $0.53, before severance and investigation costs. Fourth quarter results include the following items:
- $21 million in inventory reserves and write-offs;
- $12 million in expenses associated with business process and supply chain improvement projects, which will be ongoing for the next nine quarters;
- An $8 million legal charge regarding settlement of a multi-year dispute;
- $4 million of expenses incurred in connection with the completion of the company's global tax reorganization during the fourth quarter; and
- A $3 million net gain on acquisition and divestiture activities
Fourth quarter revenues were $2,426 million, or eight percent lower than the same period last year, against a backdrop of a 29 percent decrease in global rig count. North America was primarily responsible for the decline, with revenues decreasing 37 percent against a 40 percent decline in rig count. International revenues were up 16 percent against an eight percent decrease in international rig count.
Sequentially, the company's fourth quarter diluted earnings per share from continuing operations, before severance, reorganization and investigation costs, were $0.11 lower than the third quarter of 2009 diluted earnings per share from continuing operations of $0.13, before severance and investigation costs.
For the year ended December 31, 2009, revenues were $8.8 billion, eight percent lower than 2008, and income from continuing operations before severance, reorganization and investigation costs was $364 million, or $0.50 per diluted share, a decrease of 75 percent from 2008. In 2008, the company reported revenues for the year of $9.6 billion and income from continuing operations of $1,399 million, or $2.00 per diluted share, before non-recurring items. The non-recurring items during 2008 were primarily for investigation and exit costs incurred in connection with the company's withdrawal from sanctioned countries, which were partially offset by a gain on the restructuring of a Qatar operation into a JV.
Revenues for the quarter were $736 million, which is a 37 percent decrease over the same quarter in the prior year, as compared to a 40 percent rig count decrease. Sequentially, revenues were up 19 percent in line with a 20 percent rig count increase. All product lines showed sequential growth with the exception of Pipeline.
Operating income was $42 million, which is down $255 million compared to the same quarter in the prior year and up $8 million sequentially.
Middle East/North Africa/Asia
Fourth quarter revenues of $593 million were 12 percent lower than the fourth quarter of 2008 and one percent lower than the prior quarter. On a sequential basis, strong performances were posted in Iraq, Malaysia and China offset by weakness in Saudi Arabia, Qatar, Oman, Libya, Egypt, Indonesia and Australia.
The current quarter's operating income of $82 million decreased 49 percent as compared to the same quarter in the prior year and decreased 19 percent as compared to the prior quarter due to the continued impact of significant start-up and delay costs in several countries.
Fourth quarter revenues of $618 million were 59 percent higher than the fourth quarter of 2008 and 18 percent higher than the prior quarter. Mexico, Brazil, Columbia and Ecuador posted strong improvements sequentially.
The current quarter's operating income of $49 million declined 44 percent as compared to the same quarter in the prior year. Sequentially, operating income declined nine percent as decreased activity in natural gas projects in Mexico prevented adequate fixed cost absorption.
Fourth quarter revenues of $478 million were 22 percent higher than the fourth quarter of 2008 and 18 percent higher than the prior quarter. The sequential increase was driven by a full quarter of our acquisition of TNK-BP's oilfield service business and improvements in Norway, Romania, Angola and Nigeria.
The current quarter's operating income of $43 million declined 52 percent as compared to the same quarter in the prior year and decreased 41 percent sequentially.
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