HOUSTON, Oct 20, 2004 /PRNewswire-FirstCall via COMTEX/ -- Weatherford International Ltd. (NYSE: WFT) today reported 2004 third quarter diluted earnings per share from continuing operations of $0.49 on income from continuing operations of $69.8 million. Third quarter's diluted earnings per share from continuing operations were 23 percent higher than the previous quarter, excluding the second quarter gain on sale of Universal Compression common stock, and 44 percent more than the level achieved in the same quarter of 2003, excluding debt redemption expense.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990308/WEATHERFORDLOGO )
Revenues for the third quarter were $794.3 million, up 23 percent from the $647.6 million reported in the same quarter last year. Operating income was $111.0 million for the quarter, 21 percent and 44 percent higher than operating income in the second quarter of 2004 and the third quarter of 2003, respectively.
In the first nine months of 2004, revenues were $2.2 billion, and income from continuing operations was $179.1 million, or $1.27 per diluted share, before the second quarter gain on sale of Universal Compression common stock. In 2003, reported revenues for the first nine months were $1.9 billion, and income from continuing operations before non-recurring expenses was $121.7 million, or $0.93 per diluted share.
The company's third quarter revenues improved $52.2 million, or 7 percent, sequentially. Revenue growth outpaced average quarterly rig count gains in the United States, Latin America, Europe/West Africa and Asia Pacific regions. Significant revenue improvements of 12 percent occurred in both Europe/West Africa and Canada, despite the negative effects of the ongoing strike in Norway and unusually wet weather in Canada. United States revenue grew 6 percent in the face of continuing market disruptions imposed by storms in the Gulf of Mexico.
Drilling Services
Revenues for the quarter were $450.3 million, 6 percent above the prior quarter's record level revenues, with balanced growth in North American and international markets. International revenues improved 6 percent sequentially, well above the one percent sequential increase in rig count. All product lines posted sequential revenue gains.
Operating income of $97.9 million was 13 percent higher than the preceding quarter. Incremental operating income as a percent of incremental revenue was 43 percent.
Production Systems
Third quarter revenues of $344.1 million were 8 percent higher than the prior quarter, with balanced growth from all three product lines. From a geographic perspective, Eastern Hemisphere revenues grew 15 percent sequentially with Europe/West Africa and Asia Pacific experiencing the most significant improvements. North American sequential revenue growth was 9 percent, led by the seasonal recovery in Canada.
The current quarter's operating income of $44.0 million increased 41 percent compared to the second quarter of 2004, with operating margins improving 290 basis points.
Corporate Expenses
Corporate expenses increased sequentially and as compared to the same period last year due to corporate governance compliance. These expenses are primarily associated with the company's Sarbanes-Oxley 404 project.
Conference Call
The company will host a conference call with financial analysts to discuss the third quarter 2004 results on October 21, 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 Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
(Restated) (Restated)
Net Revenues:
Drilling Services $450,268 $383,359 $1,278,899 $1,091,079
Production Systems 344,073 264,289 970,270 760,540
794,341 647,648 2,249,169 1,851,619
Operating Income (Expense):
Drilling Services 97,902 76,044 261,548 205,862
Production Systems 43,976 27,511 111,512 89,452
Research and Development (20,445) (19,966) (59,719) (61,825)
Equity in Earnings 5,279 5,639 16,557 10,503
Non-recurring Expense --- --- --- (7,710)
Corporate Expenses (15,683) (11,928) (39,237) (31,448)
111,029 77,300 290,661 204,834
Other Income (Expense):
Gain on Sale of Universal
Common Stock --- --- 25,280 ---
Other, Net (905) 3,199 (1,528) 6,346
Interest Expense, Net (15,060) (17,164) (45,788) (58,743)
Debt Redemption Expense --- (20,911) --- (20,911)
Income from Continuing
Operations Before Income Taxes 95,064 42,424 268,625 131,526
Provision for Income Taxes (25,226) (17,001) (64,255) (40,974)
Benefit for Income Taxes,
Related to Debt Redemption
Expense --- 7,319 --- 7,319
Income from Continuing
Operations 69,838 32,742 204,370 97,871
Income (Loss) from
Discontinued Operations, Net
of Taxes 259 (330) (7,779) (3,356)
Net Income $70,097 $32,412 $196,591 $94,515
Basic Earnings Per Share:
Income from Continuing
Operations $0.52 $0.25 $1.53 $0.78
Income (Loss) from
Discontinued Operations 0.00 (0.00) (0.05) (0.02)
Net Income $0.52 $0.25 $1.48 $0.76
Diluted Earnings Per Share:
Income from Continuing
Operations $0.49 $0.24 $1.44 $0.75
Income (Loss) from
Discontinued Operations 0.00 (0.00) (0.05) (0.02)
Net Income $0.49 $0.24 $1.39 $0.73
Weighted Average Shares
Outstanding:
Basic 134,147 131,596 133,189 124,751
Diluted 149,089 136,465 147,829 130,211
Weatherford International Ltd.
Supplemental Information
(In 000's)
Three Months Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
(Restated) (Restated)
Geographic Revenues:
Eastern Hemisphere $300,103 $253,853 $843,177 $734,375
United States 298,274 219,222 819,569 632,530
Canada 121,482 107,265 373,201 310,545
Latin America 74,482 67,308 213,222 174,169
$794,341 $647,648 $2,249,169 $1,851,619
Depreciation and Amortization:
Drilling Services $45,197 $43,266 $135,132 $129,034
Production Systems 16,273 13,445 48,345 37,363
Research and Development 1,147 1,291 3,455 3,958
Other 644 487 1,856 2,134
$63,261 $58,489 $188,788 $172,489
Research and Development:
Drilling Services $9,942 $10,252 $29,571 $31,237
Production Systems 10,503 9,714 30,148 30,588
$20,445 $19,966 $59,719 $61,825
Selected Balance Sheet Information
(In 000's)
September 30, December 31,
2004 2003
(Restated)
Cash $105,141 $56,082
Accounts Receivable, Net 683,841 556,306
Inventories 649,877 616,748
Accounts Payable 222,733 234,599
Short-Term Borrowings and
Long-Term Debt 1,451,969 1,586,953
Shareholders' Equity 3,017,591 2,708,068
Accounts Receivable Securitization
(Off Balance Sheet) --- 75,000
Supplemental Product Line Information
(Revenue as a % of Division Total)
Three Months Ended
September 30, June 30,
2004 2004
Drilling Services:
Drilling Methods 21.5% 21.6%
Drilling Tools 24.0% 23.0%
Well Construction 35.6% 36.6%
Intervention Services 18.9% 18.8%
100.0% 100.0%
Production Systems:
Completion Systems 34.0% 33.8%
Artificial Lift Systems 51.8% 52.1%
Production Optimization 14.2% 14.1%
100.0% 100.0%
SOURCE Weatherford International Ltd.
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.
http://www.weatherford.com