Just my 2 cents. Anyone looking at investing for the "long haul" needs to understand the fundamentals or they will probably find themselves making too many mistakes based on TA alone....but I'm sure you already know this.
Weatherford Reports Third Quarter 1999 Results
HOUSTON, Oct. 25 /PRNewswire/ -- Weatherford International, Inc.
(NYSE: WFT) today reported results for the third quarter of 1999. Income from
continuing operations was $3.0 million, or 3 cents per share, on revenues of
$323.6 million, compared to income from continuing operations of
$22.2 million, or 23 cents per share, on revenues of $322.3 million.
Operating income in the third quarter of 1999 was $17.6 million compared to
$43.7 million in the comparable quarter last year.
Revenues in 1999 benefited from acquisitions and joint ventures completed
in 1999. The relative decline in operating income on a year on year basis in
the third quarter of 1999 reflected the general effects of the downturn in the
industry, including a continuing deterioration in activity levels in the
higher margin international markets and lower margins in the North American
services segment.
The Company recently announced its intent to spinoff to its stockholders
its Grant Prideco Drilling Products Division. A registration statement
relating to the spinoff has recently been filed with the Securities and
Exchange Commission. Because of Weatherford's intention to spinoff Grant
Prideco, all current and prior period financial results attributable to Grant
Prideco have been reclassified to "Income (Loss) from Discontinued Operations,
Net of Tax." Loss from discontinued operations for the third quarter 1999 was
$14.1 million, or 14 cents per share, inclusive of $3.6 million of transaction
costs, net of tax, directly related to the spinoff.
Chairman and CEO of Weatherford, Bernard J. Duroc-Danner, commenting on
the third quarter results, "Although the levels of profitability are obviously
modest, the third quarter reversed recent quarter on quarter trends. The
sequential improvement in revenues and earnings are directly attributable to
higher activity levels in North America, primarily in our Artificial Lift
division where revenues increased 27 percent over prior quarter levels.
Compression services also showed good quarter on quarter improvements.
International activity, on the other hand, has continued to deteriorate from
already depressed levels which has hampered recovery in some of our
businesses, in particular, completion and oilfield services."
For the nine months ended September 30, 1999, revenues were
$867.6 million, a decrease of 18 percent compared to last year. Income from
continuing operations was $8.7 million compared to $92.7 million last year,
excluding one time charges related to the merger of EVI and Weatherford
Enterra of $73.5 million after tax.
Completion and Oilfield Services
Revenues in our Completion and Oilfield Services segment declined
16 percent from last year's third quarter to $177 million, but was up
10 percent sequentially. The improvement in revenues in our Completion and
Oilfield Services segment is primarily attributable to revenue increases in
North America. International activity in general declined throughout the
quarter as the major oil companies continue to focus on their own
consolidations and internal restructuring.
Margins in our Completion and Oilfield Services segment were depressed
during the quarter due to a deterioration of activity in the international
markets, fixed costs required to maintain our international infrastructure,
increased expenditures for research and development and costs associated with
recent acquisitions as those acquisitions are integrated into our businesses.
During the quarter, Weatherford acquired Petroline Wellsystems, the
leading provider of flow control equipment in the North Sea and "best-in-
class" sand control equipment, adding critical competencies to our completion
systems product line. In addition, Weatherford acquired Dailey International,
Inc., a leading manufacturer of drilling and fishing jars and a leading
provider of underbalanced drilling services, and Williams Tool Co., a leading
supplier of pressure control equipment, necessary in underbalanced drilling
applications. The combination of Dailey, Williams Tool and our prior ECD
acquisition has made Weatherford the worldwide leader and provider of
underbalanced drilling services.
Artificial Lift Systems
Artificial lift revenues were up 12 percent from the third quarter 1998 to
$78.7 million. The increase in revenues is primarily attributable to
increased activity in North America, in particular Canada. This segment has
also seen increased sales in the South American markets as its artificial lift
products have begun to penetrate those markets utilizing Weatherford's
extensive worldwide infrastructure. Sequentially, revenues were up 27 percent
primarily due to increased activity in the U.S., Canada and South America.
Margins for this group were up during the quarter due to improved market
conditions.
Compression Services
Weatherford Global Compression Services (WGCS), the joint venture between
GE Capital and Weatherford formed early this year, had revenues of
$67.9 million, significantly higher than both the prior year third quarter and
second quarter 1999. Continued expansion into high value added, longer term
contracts provided most of the revenue growth. Tender activity is high and we
would expect continued growth in revenues in this division.
Drilling Products
As noted earlier, Grant Prideco's operations are being shown as
discontinued in the third quarter 1999. Despite a slight improvement in
drilling activity in the third quarter, Grant Prideco's revenues did not
benefit in the quarter due to the historical time lag with increased drilling
activity. We expect that Grant Prideco's premium tubular revenues and results
will improve markedly during the fourth quarter over the third quarter. We do
not, however, expect a material improvement in Grant Prideco's drill stem
markets until mid 2000.
Drilling product revenues were down 64 percent from the third quarter 1998
and 10 percent from already low second quarter levels, resulting in a loss
from discontinued operations of $14.1 million, net, which includes
$3.6 million of direct costs related to the proposed spinoff. Revenues in
this group have bottomed as orders and backlog, particularly for premium
tubulars, have been increasing over the past two months and will equate to
significantly higher product shipments in the fourth quarter.
Houston-based Weatherford International, Inc. (http://www.weatherford.com)
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 50 countries and employs more than
10,000 people worldwide.
This press release may contain 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
integration of recent acquisitions, all of which are subject to certain risks,
uncertainties and assumptions. These risks and uncertainties, which are more
fully described in Weatherford International, Inc.'s Annual, Quarterly and
Current Reports filed with the Securities and Exchange Commission, include the
impact of oil and natural gas prices and worldwide economic conditions on
drilling activity and the demand for and pricing of Weatherford's products.
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. |
