Weatherford International provides diversified oilfield services across international markets for an array of oilfield types. The firm is a global market leader in artificial lift and tubular running services. Other key product lines include cementing products, directional drilling, and wireline evaluation.
Performance Overview
Weatherford International PLC (WFRD, Financial) reported revenues of $1,405 million for Q2 2024, reflecting a 3.5% sequential increase and a 10% year-over-year increase. However, this figure slightly missed the analyst estimate of $1,419.24 million. The company's operating income stood at $264 million, a 13% sequential increase and a 31% year-over-year increase.
Net income for the quarter was $125 million, representing an 8.9% margin, which is a 12% sequential increase and a 52% year-over-year increase. Adjusted EBITDA was $365 million, a 26.0% margin, showing a 9% sequential increase and a 25% year-over-year increase. Diluted income per share was $1.66, matching the analyst estimate.
Key Financial Achievements
Weatherford International PLC (WFRD, Financial) introduced its first-ever shareholder return program, including an annual dividend of $1 per share and a three-year share repurchase program of $500 million. The company also initiated a regular quarterly cash dividend of $0.25 per share, starting in September 2024.
The company fully redeemed its 6.5% Senior Secured Notes, reducing net leverage to 0.5x, with long-term debt at $1.6 billion. Additionally, Weatherford expanded the size of its Credit Facility to $720 million.
Segment Performance
| Segment | Revenue (Q2 2024) | Revenue (Q1 2024) | Revenue (Q2 2023) | Sequential Change | Year-over-Year Change |
|---|---|---|---|---|---|
| Drilling and Evaluation (DRE) | $427 million | $422 million | $394 million | 1% | 8% |
| Well Construction and Completions (WCC) | $504 million | $458 million | $440 million | 10% | 15% |
| Production and Intervention (PRI) | $369 million | $348 million | $366 million | 6% | 1% |
Geographical Performance
North America revenue decreased by 6% sequentially to $252 million, primarily due to a seasonal decline in activity in Canada. International revenue increased by 6% sequentially and 14% year-over-year to $1,153 million. The Middle East/North Africa/Asia region showed the most significant growth, with a 9% sequential increase and a 29% year-over-year increase to $542 million.
Commentary
"The One Weatherford team once again delivered excellent results on margins and adjusted free cash flow. Beyond the usual seasonal effects, we faced some revenue headwinds driven by weather events, social unrest leading to reduced activity in Colombia, and timing shifts in activity in some regions. However, the strong margin performance demonstrates the operating intensity, portfolio differentiation, and continued growth runway that we have in place." - Girish Saligram, President and Chief Executive Officer
Analysis
Weatherford International PLC (WFRD, Financial) demonstrated robust financial performance in Q2 2024, with significant year-over-year growth in revenue, operating income, and net income. The introduction of a shareholder return program and the reduction in net leverage are positive indicators of the company's financial health and commitment to returning value to shareholders. However, the slight miss in revenue compared to analyst estimates and challenges in specific regions like North America and Latin America highlight areas that may need strategic focus moving forward.
Overall, Weatherford International PLC (WFRD, Financial) appears well-positioned for continued growth, supported by its diversified service offerings and strong international presence.
Explore the complete 8-K earnings release (here) from Weatherford International PLC for further details.
