Weatherford Posts Smaller-Than-Expected Loss On Higher Drilling
HOUSTON, July 27 (Reuters) - Oilfield services provider Weatherford International Plc reported a smaller-than-expected loss on Friday, as a recovery in crude prices encouraged producers to ramp up spending and complete more wells in the United States.
Weatherford was hit hard by the 2014 downturn in oil prices and has not posted a quarterly profit since 2014. It has been restructuring operations and selling assets to pare debt.
Investors have been watching Weatherford's results for signs Chief Executive Officer Mark McCollum can turn around the debt-laden company. McCollum, who took over in 2017, has vowed to shed underperforming businesses and cut $1 billion in costs by 2019.
Excluding one-time items, Weatherford reported a net loss of $156 million, or 16 cents per share, versus loss of $282 million, or 28 cents per share, last year. Analysts on average had expected a loss of 18 cents per share, according to Thomson Reuters I/B/E/S.
Shares of Weatherford were up more than 2 percent at 11 a.m. EDT, trading at $3.5.
The company benefited from stronger results in its Western Hemisphere operations during the quarter, particularly in U.S. and Latin American operations.
"We consider this a net positive outcome as the company in trending favorably in terms of under-promising and over-delivering," analysts at Tudor Pickering Holt & Co wrote on Friday after the firm beat expectations on earnings.
Revenue from Weatherford's U.S., Canadian and Latin American operations rose 13 percent year-over-year to $769 million, bolstered by record U.S. oil production and stronger-than-expected performance in Argentina, Mexico and Colombia. The company warned that its Latin American business could face headwinds from inflationary pressures in the coming quarters.
"It may get a little bumpy," McCollum told analysts during an earnings call, pointing to rising inflation in Argentina.
Weatherford's total revenue rose 6 percent over the same quarter a year ago to $1.45 billion.
Revenues in its Eastern Hemisphere business, which includes Middle East, Asia and Russia, fell to $679 million from $685 million a year ago.
Weatherford said it would continue to sell assets in a bid to reduce debt, which stood at $7.5 billion at the end of the second quarter.
In July, the company, in two separate deals, sold 31 land rigs to ADES International and its 50 percent stake in a Sunita Hydrocolloids, which manufacturers a pressure pumping gelling agent.
The quarter included an expense of more than $100 million to write down some onshore rigs.
(Reporting by John Benny in Bengaluru Editing by Sriraj Kalluvila and Bill Trott)
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