HOUSTON, May 5, 2003 /PRNewswire-FirstCall via COMTEX/ -- Weatherford International Ltd. (NYSE: WFT) today reported 2003 first quarter revenues of $589.3 million and net income of $33.6 million, or $0.27 per diluted share. In the first quarter of 2002, revenues and net income were $568.2 million and $45.2 million ($0.36 per diluted share), respectively.
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On a sequential basis, first quarter revenues and operating income increased one percent and 23 percent above the fourth quarter of 2002, respectively. Diluted earnings per share increased to $0.27 per share in the first quarter from $0.25 per share in the fourth quarter, which included $8.0 million (or $5.6 million net of taxes) of non-operating gains, primarily from the sale of assets.
The first quarter 2003 operating income reflected the benefits of the initial phase of recovery in North American drilling activity and cost reduction initiatives undertaken in the prior quarter, offset by activity declines due to turmoil in Venezuela, Nigeria and military actions in the Middle East.
The Company also announced today a change in the alignment of its business segments forming two divisions, Drilling Services and Production Systems, out of three. This realignment was undertaken to improve the Company's ability to serve its customers' interests, better coordinate Weatherford's business efforts across divisions, accelerate the delivery of strategic technologies to the marketplace and generate substantial operating efficiencies across the Company. The attached statements of income have been prepared on the new divisional basis.
Drilling Services
This division encompasses the Company's product and service lines dedicated to drilling and well services, including drilling, well construction and well intervention products and services. It also includes new technologies in the early phase of commercialization such as Solid Expandables and Drilling with Casing. Revenues in the first quarter of 2003 were $345.7 million, slightly below the level of the preceding fourth quarter of 2002. Operating income of $64.3 million was 21 percent higher on the same sequential basis. Sequentially strong revenue growth in the United States and Canada offset regional declines in Europe, Middle East, Africa and Latin America, contributing to more than a 300 basis point improvement in divisional operating profit margin.
Production Systems
This division encompasses the Company's completion, artificial lift and specialty chemicals business units including emerging technology businesses of Expandable Sand Screen, Intelligent Well and Production Optimization systems. Revenues in the first quarter were $243.7 million, or five percent, higher on a sequential basis. Strong revenue performances in North America and Europe/West Africa were somewhat offset by a decline in Latin America and Asia Pacific. A sequential operating profit decline of six percent reflected product mix.
The Company's Research and Development expenditures of $20.0 million declined 18 percent sequentially due principally to high costs for prototype development in the fourth quarter of 2003.
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 15,000 people worldwide.
Contact: Don Galletly (713) 693-4148
Lisa Rodriguez (713) 693-4746
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, Weatherford's prospects for its operations and the successful integration of the plan of restructuring, all of which are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in Weatherford International Ltd.'s reports and registration statements filed with the SEC, include the impact of oil and natural gas prices and worldwide economic conditions on drilling activity, the demand for and pricing of Weatherford's products and services, domestic and international economic and regulatory conditions and changes in tax and other laws affecting our business. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated.
Weatherford International Ltd.
Consolidated Condensed Statements of Income
(In 000's, Except Per Share Amounts)
Three Months
Ended March 31,
2003 2002
Net Revenues:
Drilling Services $345,676 $338,359
Production Systems 243,662 229,890
589,338 568,249
Operating Income (Loss):
Drilling Services 64,333 73,898
Production Systems 30,643 35,749
Research and Development (19,999) (16,984)
Equity in Earnings 4,562 6,853
Corporate Expenses (9,814) (9,280)
69,725 90,236
Other Income (Expense):
Other, Net (249) 2,049
Currency Loss (2,322) (2,808)
Interest Expense, Net (20,808) (20,956)
Income Before Income Taxes 46,346 68,521
Provision for Income Taxes (12,745) (23,302)
Net Income $33,601 $45,219
Earnings Per Share:
Basic $0.28 $0.38
Diluted $0.27 $0.36
Weighted Average Shares Outstanding:
Basic 121,185 119,161
Diluted 126,554 133,807
Weatherford International Ltd.
Supplemental Information
(In 000's)
Three Months
Ended March 31,
2003 2002
Geographic Revenues:
Eastern Hemisphere $235,957 $241,705
United States 199,310 196,421
Canada 108,608 82,230
Latin America 45,463 47,893
$589,338 $568,249
Depreciation and Amortization:
Drilling Services $42,425 $39,422
Production Systems 11,848 9,364
Research and Development 1,285 725
Other 728 523
$56,286 $50,034
Research and Development:
Drilling Services $10,077 $7,419
Production Systems 9,922 9,565
$19,999 $16,984
Weatherford International Ltd.
Historical Divisional Results
(In 000's)
Drilling Production
Services Systems
For the Three Months Ended:
December 31, 2002:
Revenues $349,028 $232,857
Operating Income 53,222 32,515
Depreciation and Amortization 43,307 11,546
Research and Development 9,680 14,759
September 30, 2002:
Revenues $347,536 $237,394
Operating Income 66,267 28,488
Depreciation and Amortization 42,609 10,716
Research and Development 8,753 10,871
June 30, 2002:
Revenues $339,944 $253,922
Operating Income 67,124 39,997
Depreciation and Amortization 40,982 10,772
Research and Development 7,609 10,930
March 31, 2002:
Revenues $338,359 $229,890
Operating Income 73,898 35,749
Depreciation and Amortization 39,422 9,364
Research and Development 7,419 9,565
SOURCE Weatherford International Ltd. Don Galletly, +1-713-693-4148, or Lisa Rodriguez, +1-713-693-4746, both of Weatherford International