I’ll begin by admitting to cautious feelings about Weatherford International (NYSE:WFT) , the smallest of four companies — beginning with kingpin Schlumberger (NYSE:SLB) — that have traditionally been lumped together as the major diversified providers of worldwide support to oil and gas operators.
On the one hand, the company offers a wide range of global capabilities, including a proprietary system for pressure management in the mushrooming arena of subsea production. But on the other, the company continues to endeavor to extricate itself from tax and Foreign Corrupt Practices Act scrapes, efforts that tend to set it apart negatively from its peers.
The quarter’s numbers
Before examining any of those subjects, let’s glance at the company’s recently reported quarterly results. Its loss for the second quarter came to $118 million, or $0.15 per share, obviously an improvement from a loss of $849 million, or $1.11 per share, in the comparable period a year ago.
Without special items, the most recent quarter would have shown an adjusted profit of $0.15 per share, or generally in line with expectations. Revenue rose 3% year over year to $3.87 billion.
From a geographic perspective, as was the case with the other three members of the foursome, North America was hardly additive. With the U.S. rig count declining and a longer than normal spring break-up in Canada, revenue from our continent fell by 10% sequentially and 8% year over year.
Internationally, the picture was far brighter. Revenues rose 9% above those of the first quarter and 12% from the year-earlier quarter. Activity was stronger than anticipated in Europe, Russia, the Middle East and North Africa, and Asia-Pacific. And while results south of the border improved very slightly, as CEO Bernard Duroc-Danner noted on his post-release call with analysts, “Latin America did better than numbers reflect, considering the quarter’s events.”
He obviously was referring to the abrupt shutdown of Mexico’s Burgos and Chicontepec operations, surprises that also affected Baker Hughes Incorporated (NYSE:BHI) adversely. However, those negatives were largely minimized by generally robust activity offshore southern Mexico, Argentina, Columbia, and Ecuador.
Leaving Iraq behind
As you likely realize, due to less than stellar contractual terms, operations by western companies in Iraq have proven to be less desirable than was originally anticipated. For instance, Exxon Mobil Corporation (NYSE:XOM) has been wishy-washy about whether to continue its West Qurna-1 operations in the country. The key reason: The country is forking over a paltry $1.90 for each barrel of crude produced by the company and its partners.