EARNINGS / Weatherford Posts 48 percent Q4 Earnings Increase
NYSE SYMBOL: WII
FEBRUARY 3, 1998
HOUSTON, TEXAS--Weatherford Enterra, Inc. (NYSE - WII) today
reported record earnings of $32.7 million on revenues of $276
million for the fourth quarter of 1997. Net income increased 50
percent and revenues from ongoing businesses improved 15 percent
compared to the same period one year ago. Basic and diluted
earnings per share increased 48 percent to $0.62 from $0.42 in the
fourth quarter of 1996. These results were primarily
attributable to continued strength in oil and gas drilling and
workover activity, particularly in the North American markets.
Pricing remained firm during the quarter as demand for the
Company's services and products remained high.
Operating income from ongoing businesses improved 46 percent and
total operating income improved 41 percent to a record $55
million compared to the fourth quarter of 1996. Operating margin
of 20 percent marks the eighth consecutive quarterly operating
margin increase.
"Weatherford's results for the fourth quarter of 1997 reflect
continued strong performance in our oilfield services and products
businesses and steady improvement in our gas compression
operations," commented Tom Bates, President and Chief Executive
Officer. "New technologies in re-entry and multilateral drilling
applications continue to reduce costs for our clients and provide
unique growth opportunities for Weatherford."
For the full year of 1997, revenues surpassed the $1 billion mark
for the first time in the Company's history, with revenues from
ongoing businesses improving 22 percent and total revenues
improving 9 percent compared to 1996. Operating income for the
year increased 54 percent over 1996 to $193 million, while net
income improved 61 percent to $113 million. Diluted earnings per
share of $2.14 increased 59 percent compared to $1.35 for 1996.
The new accounting rules covering earnings per share, which went
into effect in the fourth quarter, had no significant impact on
the Company's results.
Oilfield Services
Weatherford's Oilfield Services operations are located worldwide
in oil and gas producing regions and consist of oilfield equipment
rental, downhole services including fishing and milling, and
tubular running services including the installation and testing
of casing and tubing connections.
-Revenues of $179 million in the fourth quarter of 1997 increased
20 percent compared to the same period in 1996 and 6 percent
compared to the third quarter of 1997. Operating income of $44
million grew 52 percent compared to the fourth quarter of 1996.
-U.S. revenues increased 32 percent to $88 million while
average drilling rig count improved 18 percent. Significant
revenue increases occurred in every U.S. region due to improved
pricing, increased demand and the expansion of the Company's
tubular running services capabilities in the Gulf of Mexico.
-International revenues increased 11 percent to $91 million while
average drilling rig count outside of North America improved 1
percent. Significant revenue increases occurred in the Middle
East, Asia Pacific, North Africa and Canada.
-Operating margin was 25 percent, compared to 19 percent in the
fourth quarter of 1996.
Oilfield Products
Closely aligned with Oilfield Services, Weatherford's Oilfield
Products segment includes the manufacture, sale and service of
cementation products, Nodeco(tm) liner hangers, McMurry-Macco(tm)
gas lift equipment and other equipment used to provide oilfield
services.
-Revenues of $47 million in the fourth quarter of 1997 decreased 7
percent compared to the fourth quarter of 1996, while operating
income improved 23 percent to $11 million. Excluding product
sales into the CIS, fourth quarter 1997 revenues increased 12
percent compared to the fourth quarter of 1996.
-Operating margin of 22 percent reflected continued pricing
strength and market leadership, particularly in the cementation
and gas lift businesses. In addition, Weatherford successfully
set the liner hanger on a world record 10 kilometer extended
reach well in the U.K.
Gas Compression
Weatherford's Gas Compression segment includes manufacturing,
packaging, renting, selling and providing parts and services for
gas compressor units over a broad horsepower range.
-Revenues of $49 million in the fourth quarter of 1997 increased
21 percent compared to the fourth quarter of 1996, primarily as a
result of higher packaged unit sales and higher U.S. rental and
service activity. Operating income more than doubled to $4
million, improving operating margins for the fifth
consecutive quarter.
-Compressor rental, parts and service revenues of $27 million
improved 17 percent year over year. At December 31, 1997, the
Company's compressor rental fleet comprised over 440,000
horsepower with a utilization rate of 86 percent -- the highest
quarterly utilization rate in over four years. The Company
expanded its international commitment with a large contract
compression award in Venezuela which will commence in 1998.
-Manufacturing and packaging revenues of $22 million in the fourth
quarter of 1997 improved 58 percent compared to the fourth quarter
of 1996.
Certain statements in this release may be deemed "forward-looking
statements" and are made in reliance upon the safe harbor
provisions of the Private Securities Litigation Reform Act of
1995. Any forward looking statements made herein are based on
various assumptions, such as the price of oil and gas, the U.S.
and international rig count and drilling activity, U.S. import
and export policies and global trade policies, worldwide
political stability and economic growth, currency fluctuations
and monetary restrictions, technological advances involving
Weatherford's products and services, availability of products and
equipment from key suppliers, availability of personnel,
regulatory uncertainties and legal proceedings. Although
Weatherford believes its assumptions are reasonable, there are
certain risks and uncertainties inherent in Weatherford's business
and there can be no assurance that such assumptions will prove to
have been correct. Weatherford Enterra is a Houston,
Texas-based diversified international energy service and
manufacturing company that provides a variety of services and
equipment to the exploration, production and transmission sectors
of the oil and gas industry.
/T/
WEATHERFORD ENTERRA, INC. AND SUBSIDIARIES
(In thousands except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
----------------------------------------
1997 1996 1997 1996
---- ---- ---- ----
REVENUES:
Oilfield Services...$ 178,897 148,813 $ 645,906 520,195
Oilfield Products.... 47,241 50,739 182,311 149,713
Gas Compression...... 49,497 41,025 178,896 154,503
Other Businesses..... -- 42,198 76,852 170,057
--------- -------- --------- ------
Total revenues.... 275,635 282,775 1,083,965 994,468
--------- --------- --------- --------
COSTS AND EXPENSES:
Cost of sales and
services........ 182,667 202,244 726,540 714,346
Selling, general and
administrative
expenses......... 34,143 38,432 140,229 140,614
Research and
development....... 1,586 2,298 7,782 7,154
Other expense
(income), net..... 2,013 629 16,332 6,598
--------- -------- --------- -------
Total costs and
expenses........ 220,409 243,603 890,883 868,712
--------- --------- --------- --------
OPERATING INCOME:
Oilfield Services.... 43,922 28,968 152,668 93,644
Oilfield Products.... 10,614 8,599 39,129 23,388
Gas Compression...... 4,025 1,780 13,723 7,833
Other Businesses..... -- 1,235 440 8,849
Corporate............ (3,335) (1,410) (12,878) (7,958)
---------- ------- --------- -------
Total operating
income.......... 55,226 39,172 193,082 125,756
Interest expense...... 4,076 6,200 20,139 22,914
Interest income....... (860) (549) (2,630) (2,005)
---------- -------- ---------- --------
Income before income
taxes............... 52,010 33,521 175,573 104,847
Income tax provision,
net.................. 19,291 11,651 62,673 34,774
---------- -------- ---------- --------
NET INCOME.......... $ 32,719 $ 21,870 $ 112,900 $ 70,073
-------------------- --------------------
-------------------- --------------------
Basic earnings per
common share..... $ 0.62 $ 0.42 $ 2.15 $ 1.35
-------------------- --------------------
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Diluted earnings per
common share.......$ 0.62 $ 0.42 $ 2.14 $ 1.35
-------------------- --------------------
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Weighted average shares
outstanding........ 52,628 52,122 52,430 51,722
Diluted average shares
outstanding........ 53,068 52,429 52,837 52,097
DEPRECIATION AND
AMORTIZATION:
Oilfield Services..$ 19,421 $ 18,625 $ 75,582 $ 70,552
Oilfield Products.... 2,298 1,898 8,265 6,264
Gas Compression...... 5,598 6,085 21,666 23,554
Other Businesses..... -- 991 1,541 4,787
Corporate............ 965 268 3,756 700
-------------------- --------------------
$ 28,282 27,867 $ 110,810 105,857
-------------------- --------------------
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/T/ |
