SYS-CON MEDIA Authors: Carmen Gonzalez, Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel

News Feed Item

Weatherford Updates Fourth Quarter 2013 Guidance

Confirms Significant Reduction in Net Debt; Announces Cost Reduction Measures

GENEVA, Jan. 30, 2014 /PRNewswire/ -- Weatherford International Ltd. (NYSE / Euronext Paris / SIX: WFT) today updates its projected fourth quarter 2013 earnings per share (non-GAAP) financial results. Earnings per share for the fourth quarter 2013 are estimated to be in the range of $0.05 - $0.08. The shortfall can be primarily attributed to the following factors:

  • Capital discipline driven activity reductions in Latin America;
  • Operational disruptions in the Middle East;
  • Severe weather conditions, adversely impacting activity in North America and the North Sea; and
  • Incremental tax planning items, which increased the fourth quarter effective tax rate to approximately 50%, adding $0.03 to the fourth quarter tax expense. These items are expected to favorably impact the tax rate for the Company going forward.

(Logo: http://photos.prnewswire.com/prnh/19990308/WEATHERFORDLOGO)

Despite the shortfalls described above, net debt was reduced by nearly $700 million during the fourth quarter, reflecting strong operating cash flow and the partial monetization of the previously announced divestiture of the Borets joint venture.

The Company established a culture of capital discipline in 2013, successfully resolved the U.S. government investigations, and expects to announce the remediation of the material weakness in income tax accounting when we file our Form 10-K for 2013. The Company identified the non-core businesses which have now been slated for divestiture. These are essential steps in our transformational plan.

2014 Outlook

In 2014, we are focused on achieving a step change in profitability by:

  • Focusing the organization on growing our core businesses;
  • Making our cost base more efficient; and
  • Divesting our non-core businesses and reducing our net debt.

The operational update going into 2014 is positive. Some highlights are:

  • During the fourth quarter, the Company secured an incremental $1.5 billion in multi-year contracts for well construction across all regions;
  • Artificial Lift continues to gain market share, primarily in North America;
  • Currently, more than 80% of our U.S. pressure pumping horsepower is term contracted. During the fourth quarter, the increased focus on cost and operating efficiencies in pressure pumping are expected to drive profitability improvements in 2014; and
  • There is continued improvement on securing dayrate contracts in the Eastern Hemisphere for our rigs. Currently, more than 90% of the Eastern Hemisphere rigs are contracted.

As an important step in making our cost base more efficient, the Company has decided to reduce its workforce by 7,000 employees, primarily from its fixed support cost base. This reduction will not affect the non-core businesses of Weatherford that have been earmarked for divestiture in 2014; instead, it is designed to lighten the support structure of Weatherford to compensate for the divestiture program. The workforce reduction is expected to be completed during the first half of 2014, resulting in annualized savings of $500 million, with roughly half of this amount impacting 2014 earnings. These actions will not affect or compromise in any way Weatherford's accounting and tax processes.

Concurrently, additional strategic reviews are ongoing with a view to eliminating operations that do not have critical mass and are currently unprofitable and a drain on Weatherford's cash flow.

The non-core business divestiture program is on track as previously announced.

Based on its current activity profile, and inclusive of the benefits arising from the cost reduction actions outlined above, Weatherford expects 2014 earnings per share (non-GAAP) to range between $1.10 and $1.20 and our effective tax rate is forecasted to be 25% to 35%.

Having placed all distractions behind us, management is single-mindedly focused on operating performance. Additional details on the Company's 2014 outlook, operations, cash flow and cost reduction actions will be provided during our fourth quarter earnings conference call on February 26, 2014.

About Weatherford

Weatherford is one of the largest multinational oilfield service companies. Weatherford's product and service portfolio spans the lifecycle of the well, and includes formation evaluation, well construction, completion and production. The Company provides innovative solutions, technology and services to the oil and gas industry, and operates in over 100 countries currently employing more than 65,000 people worldwide.

Contact:

Krishna Shivram

+1.713.836.4610


Executive Vice President and Chief Financial Officer




Karen David-Green

+1.713.836.7430


Vice President – Investor Relations


Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, the Company's non-GAAP earnings per share and the size, timing and benefits of the reduction in workforce, and are also generally identified by the words "believe," "project," "expect," "anticipate," "estimate," "budget," "intend," "strategy," "plan," "guidance," "may," "should," "could," "will," "would," "will be," "will continue," "will likely result," and similar expressions, although not all forward-looking statements contain these identifying words. Such statements are based upon the current beliefs of Weatherford's management, and are subject to significant risks, assumptions and uncertainties. Should one or more of these risks or uncertainties materialize, or underlying assumptions prove incorrect, actual results may vary materially from those indicated in our forward-looking statements. Specifically, statements regarding the current period assume that there will be no subsequent events or other adverse developments after the date of this press release that cause our financial statements for the current period, when filed with the SEC, to vary materially from the amounts herein. Readers are also cautioned that forward-looking statements are only predictions and may differ materially from actual future events or results due to the Company's ability to implement workforce reductions in various geographies; possible changes in the size and components of the expected costs and charges associated with the reduction plan; and risks associated with the Company's ability to achieve the benefits of the planned workforce reduction. Additionally, the Company has not completed our review of our financial information for the fourth quarter of 2013, and accordingly, expected results are subject to change. Forward-looking statements also are affected by the risk factors described in the company's Annual Report on Form 10-K for the year ended December 31, 2012, and those set forth from time-to-time in other filings with the Securities and Exchange Commission ("SEC"). We undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events, or otherwise, except to the extent required under federal securities laws.

SOURCE Weatherford International Ltd.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
What do a firewall and a fortress have in common? They are no longer strong enough to protect the valuables housed inside. Like the walls of an old fortress, the cracks in the firewall are allowing the bad guys to slip in - unannounced and unnoticed. By the time these thieves get in, the damage is already done and the network is already compromised. Intellectual property is easily slipped out the back door leaving no trace of forced entry. If we want to reign in on these cybercriminals, it's hig...
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will w...
"ElasticBox is an enterprise company that makes it very easy for developers and IT ops to collaborate to develop, build and deploy applications on any cloud - private, public or hybrid," stated Monish Sharma, VP of Customer Success at ElasticBox, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from ha...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
"SAP had made a big transition into the cloud as we believe it has significant value for our customers, drives innovation and is easy to consume. When you look at the SAP portfolio, SAP HANA is the underlying platform and it powers all of our platforms and all of our analytics," explained Thorsten Leiduck, VP ISVs & Digital Commerce at SAP, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The 3rd International Internet of @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that its Call for Papers is now open. The Internet of Things (IoT) is the biggest idea since the creation of the Worldwide Web more than 20 years ago.
SAP is delivering break-through innovation combined with fantastic user experience powered by the market-leading in-memory technology, SAP HANA. In his General Session at 15th Cloud Expo, Thorsten Leiduck, VP ISVs & Digital Commerce, SAP, discussed how SAP and partners provide cloud and hybrid cloud solutions as well as real-time Big Data offerings that help companies of all sizes and industries run better. SAP launched an application challenge to award the most innovative SAP HANA and SAP HANA...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective ...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using ...