Led By Growth in the Eastern Hemisphere and the U.S.
HOUSTON, July 22 /PRNewswire-FirstCall/ -- Weatherford International Ltd. (NYSE: WFT) today reported 2004 second quarter diluted earnings per share from continuing operations of $0.57 on income from continuing operations of $81.0 million. Second quarter results include a gain of $25.3 million, or $0.17 per diluted share, relating to the sale of three million shares of Universal Compression Holdings, Inc.'s common stock.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990308/WEATHERFORDLOGO )
Excluding the gain on sale of common stock, second quarter income from continuing operations was $0.40 per diluted share, an increase over the prior quarter diluted earnings per share of $0.38.
Revenues for the second quarter were $742.2 million, 20 percent higher than the $616.2 million reported last year. Operating income was $92.0 million for the quarter, 33 percent higher than the second quarter 2003 operating income, excluding severance and the company's portion of Universal Compression's debt restructuring charge.
In the first six months of 2004, revenues were $1.5 billion, and income from continuing operations was $109.3 million, or $0.78 per diluted share, before the gain on sale of Universal common stock. In 2003, reported revenues for the first six months were $1.2 billion, and income from continuing operations before non-recurring expenses was $75.3 million, or $0.59 per diluted share.
The company's second quarter revenues improved $29.5 million, or 4 percent, sequentially. All regions contributed to the growth, with the most significant improvements occurring in the Eastern Hemisphere and Latin America, where revenues increased 7 percent and 8 percent, respectively. Despite a 15 percent North American rig count decline, sequential revenues increased slightly, with a 17 percent gain in the United States. This gain was largely offset by the seasonal decline in Canada.
Drilling Services
Revenues for the quarter were $424.9 million, more than 5 percent above the prior quarter's record level revenues. The Eastern Hemisphere, in spite of weak activity in the North Sea, led international revenue improvements. In North America, strong sequential revenue gains in the United States more than offset the severe seasonal decline in Canada. On a product line basis, both drilling methods and intervention services improved over 10% sequentially.
Operating income of $87.0 million was 13 percent higher than the preceding quarter, reflecting strong revenue growth coupled with benefits from supply chain initiatives.
Production Systems
Second quarter revenues of $317.3 million were 3 percent higher than the prior quarter, led by a 19 percent increase in production optimization revenues. From a geographic perspective, Eastern Hemisphere and Latin America sequential revenue growth were 12 percent and 16 percent, respectively. The seasonal decline in Canada was offset in part by a 16 percent gain in the United States, causing a slight decrease in sequential North American revenues. The current quarter's operating income of $31.3 million decreased 14 percent compared to the first quarter of 2004, essentially due to the Canadian seasonal activity decline.
Gain on Sale of Universal Shares
The company sold three million shares of Universal Compression common stock for net proceeds of $90.0 million. There was no tax effect associated with the disposition. A gain of $25.3 million, or $0.17 cents per diluted share, was recognized.
Discontinued Operations
The company is disposing of its non-core GSI compression fabrication business. The results of operations of this business for the current and prior periods are reflected as discontinued operations, net of taxes. For the three months ended June 30, 2004, the loss per diluted share from discontinued operations of $0.05 includes a loss from operations of $2.2 million, or $0.01 per diluted share, and a non-cash write down of $5.2 million, or $0.04 cents per diluted share.
Conference Call
The Company will host a conference call with financial analysts to discuss the second quarter 2004 results on July 22, at 9:00 a.m. (CDT). The Company invites investors to listen to a play back of the conference call at the Company's website, http://www.weatherford.com in the "investor relations" section. Further, the "investor relations/financial information" section of the Company's website includes a disclosure and reconciliation of non-GAAP financial measures that are used in this release and that may be used periodically by management when discussing the Company's financial results with investors and analysts.
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 17,000 people worldwide.
Contact: Lisa W. Rodriguez (713) 693-4746
Chief Financial Officer
Andrew P. Becnel (713) 693-4136
Vice President-Finance
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 Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
(Restated) (Restated)
Net Revenues:
Drilling Services $424,912 $362,044 $828,631 $707,720
Production Systems 317,276 254,150 626,197 496,251
742,188 616,194 1,454,828 1,203,971
Operating Income (Expense):
Drilling Services 86,950 65,543 163,646 129,818
Production Systems 31,254 30,116 67,536 61,941
Research and Development (20,021) (21,917) (39,274) (41,859)
Equity in Earnings 6,025 302 11,278 4,864
Non-recurring Expense --- (7,710) --- (7,710)
Corporate Expenses (12,186) (9,694) (23,554) (19,520)
92,022 56,640 179,632 127,534
Other Income (Expense):
Gain on Sale of Universal
Common Stock 25,280 --- 25,280 ---
Other, Net (1,251) 5,631 (623) 3,147
Interest Expense, Net (15,054) (20,874) (30,728) (41,579)
Income from Continuing
Operations Before Income Taxes 100,997 41,397 173,561 89,102
Provision for Income Taxes (19,965) (11,001) (39,029) (23,973)
Income from Continuing Operations 81,032 30,396 134,532 65,129
Loss from Discontinued
Operations, Net of Taxes (7,143) (1,823) (8,038) (3,026)
Net Income $73,889 $28,573 $126,494 $62,103
Basic Earnings Per Share:
Income from Continuing Operations $0.61 $0.25 $1.01 $0.54
Loss from Discontinued Operations (0.05) (0.01) (0.06) (0.03)
Net Income $0.56 $0.24 $0.95 $0.51
Diluted Earnings Per Share:
Income from Continuing Operations $0.57 $0.24 $0.95 $0.51
Loss from Discontinued Operations (0.05) (0.02) (0.05) (0.02)
Net Income $0.52 $0.22 $0.90 $0.49
Weighted Average Shares
Outstanding:
Basic 133,107 121,471 132,710 121,328
Diluted 147,597 127,409 147,273 127,039
Weatherford International Ltd.
Supplemental Information
(In 000's)
Three Months Six Months
Ended June 30, Ended June 30,
2004 2003 2004 2003
(Restated) (Restated)
Geographic Revenues:
Eastern Hemisphere $280,293 $246,126 $543,074 $480,522
United States 281,239 213,998 521,295 413,308
Canada 108,670 94,672 251,719 203,280
Latin America 71,986 61,398 138,740 106,861
$742,188 $616,194 $1,454,828 $1,203,971
Depreciation and Amortization:
Drilling Services $45,046 $43,343 $89,935 $85,768
Production Systems 16,297 12,122 32,072 23,918
Research and Development 1,131 1,382 2,308 2,667
Other 628 919 1,212 1,647
$63,102 $57,766 $125,527 $114,000
Research and Development:
Drilling Services $9,815 $10,889 $19,629 $20,985
Production Systems 10,206 11,028 19,645 20,874
$20,021 $21,917 $39,274 $41,859
Selected Balance Sheet Information
(In 000's)
June 30, December 31,
2004 2003
(Restated)
Cash $59,780 $56,082
Accounts Receivable, Net 571,696 556,306
Inventories 643,874 616,748
Accounts Payable 204,980 234,599
Short-Term Borrowings and Long-Term Debt 1,460,292 1,586,953
Supplemental Product Line Information
(Revenue as a % of Division Total)
Three Months Ended
June 30, March 31,
2004 2004
Drilling Services:
Drilling Methods 21.6% 20.7%
Drilling Tools 23.0% 24.3%
Well Construction 36.6% 37.1%
Intervention Services 18.8% 17.9%
100.0% 100.0%
Production Systems:
Completion Systems 33.8% 36.2%
Artificial Lift Systems 52.1% 51.6%
Production Optimization 14.1% 12.2%
100.0% 100.0%
Weatherford International Ltd.
Historical Consolidated Condensed Statements of Income
Restated for Discontinued Operations
(In 000's, Except Per Share Amounts)
Three Months Ended
03/31/2004 12/31/2003 09/30/2003 06/30/2003 03/31/2003
Net Revenues:
Drilling Services $403,719 $402,525 $383,359 $362,044 $345,676
Production Systems 308,921 307,890 264,289 254,150 242,101
712,640 710,415 647,648 616,194 587,777
Operating Income
(Expense):
Drilling Services 76,696 74,712 76,044 65,543 64,275
Production Systems 36,282 33,119 27,511 30,116 31,825
Research and
Development (19,253) (20,138) (19,966) (21,917) (19,942)
Equity in Earnings 5,253 4,444 5,639 302 4,562
Corporate Expenses (11,368) (10,754) (11,928) (9,694) (9,826)
Non-recurring
Expense --- --- --- (7,710) ---
87,610 81,383 77,300 56,640 70,894
Other Income (Expense):
Other, Net 628 1,464 3,199 5,631 (2,484)
Interest Expense,
Net (15,674) (15,795) (17,164) (20,874) (20,705)
Charge Related to
the Redemption of
Debentures --- --- (20,911) --- ---
Income from Continuing
Operations Before
Income Taxes 72,564 67,052 42,424 41,397 47,705
Provision for Income
Taxes (19,064) (17,680) (17,001) (11,001) (12,972)
Benefit for Income
Taxes, Related to
the Redemption of
Debentures --- --- 7,319 --- ---
Income from Continuing
Operations 53,500 49,372 32,742 30,396 34,733
Loss from Discontinued
Operations, Net of
Taxes (895) (535) (330) (1,823) (1,203)
Net Income $52,605 $48,837 $32,412 $28,573 $33,530
Basic Earnings Per
Share:
Income from
Continuing
Operations $0.40 $0.37 $0.25 $0.25 $0.29
Loss from
Discontinued
Operations (0.00) (0.00) (0.00) (0.01) (0.01)
Net Income $0.40 $0.37 $0.25 $0.24 $0.28
Diluted Earnings Per
Share:
Income from
Continuing
Operations $0.38 $0.36 $0.24 $0.24 $0.27
Loss from
Discontinued
Operations (0.00) (0.00) (0.00) (0.02) (0.00)
Net Income $0.38 $0.36 $0.24 $0.22 $0.27
Weighted Average Shares
Outstanding:
Basic 132,312 131,845 131,596 121,471 121,185
Diluted 146,950 145,444 136,465 127,409 126,523
Weatherford International Ltd.
Historical Supplemental Information
Restated for Discontinued Operations
(In 000's)
Three Months Ended
03/31/2004 12/31/2003 09/30/2003 06/30/2003 03/31/2003
Geographic Revenues:
Eastern Hemisphere $262,781 $283,374 $253,853 $246,126 $234,396
United States 240,056 222,791 219,222 213,998 199,310
Canada 143,049 132,017 107,265 94,672 108,608
Latin America 66,754 72,233 67,308 61,398 45,463
$712,640 $710,415 $647,648 $616,194 $587,777
Depreciation and
Amortization:
Drilling Services $44,889 $42,803 $43,266 $43,343 $42,425
Production Systems 15,775 16,059 13,445 12,122 11,796
Research and
Development 1,177 681 1,291 1,382 1,285
Other 584 385 487 919 728
$62,425 $59,928 $58,489 $57,766 $56,234
Research and
Development:
Drilling Services $9,814 $10,708 $10,252 $10,889 $10,096
Production Systems 9,439 9,430 9,714 11,028 9,846
$19,253 $20,138 $19,966 $21,917 $19,942
SOURCE Weatherford International Ltd.
CONTACT: Lisa W. Rodriguez, Chief Financial Officer, +1-713-693-4746, or
Andrew P. Becnel, Vice President-Finance, +1-713-693-4136, both of Weatherford
International Ltd.
Web site: http://www.weatherford.com
(WFT)