Weatherford Reports Record Results of $0.64 Per Diluted Share
Thursday July 28, 7:39 am ET
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Announces Redemption of Zero Coupon Convertible Senior Debentures
HOUSTON, July 28 /PRNewswire-FirstCall/ -- Weatherford International Ltd. (NYSE: WFT) today reported second quarter 2005 net income of $94.7 million from continuing operations or $0.64 per diluted share. The company continues to post record earnings as second quarter diluted earnings per share from continuing operations improved 8.5 percent from first quarter diluted earnings per share before non-recurring charges and 60 percent from second quarter 2004 diluted earnings per share of $0.40 which excluded the gain relating to the company's sale of Universal Compression Holdings, Inc.'s common stock. The annual improvement of 60 percent was propelled by our commitment to infrastructure investments and technologies.
Revenues for the second quarter were $937.3 million and represent the highest revenue levels in company history. Second quarter revenues improved 9 percent sequentially despite a severe seasonal downturn in the Canadian market and 26 percent over the $742.2 million reported last year. The Eastern Hemisphere led the growth with a 20 percent increase over the prior quarter and a 28 percent increase over the second quarter 2004. North American revenues grew marginally over the prior quarter, 4 percent, as strong improvements in the U.S. were largely offset by the 23 percent decline in Canadian revenues due to spring break-up.
Operating income was $139.0 million for the quarter, 7 percent higher than the first quarter before non-recurring charges and over 50 percent higher than the same quarter in the prior year.
In the first six months of 2005, revenues were $1.8 billion and income from continuing operations before charges was $181.2 million or $1.22 per diluted share. In 2004, reported revenues for the first six months were $1.5 billion, and income from continuing operations was $109.3 million or $0.78 per diluted share excluding the gain on sale of Universal common stock.
Drilling Services
Revenues for the quarter reached record levels of $533.4 million, 10 percent above the prior quarter and 26 percent above the same quarter in the prior year. Geographically, all regions, excluding Canada, posted sequential improvements greater than 10 percent. The North Sea/Middle East and the U.S. led the improvements with a 22 percent and 16 percent increase, respectively. The strong performance in these regions more than offset the 40 percent decline in Canadian revenues.
Operating income of $121.0 million was 8 percent higher than the preceding quarter and 39 percent higher than the same quarter in the prior year. Furthermore, excluding Canada, operating income incremental margins improved 31 percent. Improvements were due to strong performances by our well construction and intervention services product lines.
Production Systems
Second quarter revenues of $403.9 million were led by a strong performance in the Eastern Hemisphere and the U.S. Revenue growth in the Eastern Hemisphere was 26 percent sequentially and 30 percent over the same period in 2004 while growth in the U.S. was 18 percent sequentially and 45 percent over the same period last year. All product lines posted increased revenues over the prior quarter.
The current quarter's operating income of $52.6 million improved 3 percent above the preceding quarter despite the negative impact of the Canadian seasonal decline. Operating income improved 68 percent as compared to the same quarter in the prior year and operating margins improved over 310 basis points.
Research and Development
The company's Research and Development expenditures were $23.9 million in the second quarter. Expenditures increased $3.9 million as compared to the same quarter in the prior year due to the continued commitment to raise the technology content of products and services.
Corporate Expenses
Corporate Expenses were relatively flat sequentially and increased $5.2 million as compared to the same period last year due primarily to corporate governance compliance and employee stock-based compensation expense.
Equity in Earnings of Unconsolidated Affiliates
Equity in Earnings of Unconsolidated Affiliates were $6.6 million for the second quarter as compared $4.2 million excluding charges in the prior quarter and $6.0 million for the second quarter 2004. The sequential increase is due to higher earnings by Universal Compression Holdings, Inc.
Acquisition of Precision
The acquisition of Precision Drilling Corporation's Energy Services and International Drilling divisions, announced in June 2005, is expected to close in late August 2005.
Redemption of Zero Coupon Convertible Senior Debentures
The company announced this morning that it is calling for redemption on August 29, 2005 of all its outstanding Zero Coupon Convertible Senior Debentures due June 30, 2020. The aggregate redemption price is expected to be approximately $578 million. The Company intends to fund the redemption of the Debentures from cash on hand and borrowings under its revolving credit agreement. Holders will have the right to convert their Debenture into the Company's common shares prior to the redemption date. |
