WEATHERFORD CUTS 3,000 JOBS
Services firm Weatherford International said Wednesday that it will cut 3,000 more jobs by the end of the year and close more facilities.
The company said in its third quarter results that it has completed its plan to eliminate 11,000 jobs and has revised that target upwards to 14,000 positions with an "increased focus on support positions."
The layoffs are expected to be completed by the end of this year.
Weatherford confirmed that it has closed five of the seven manufacturing and service facilities it plans to shutdown.
The UK-based company will close one more facility by the end of the year and the remaining facility will be closed sometime in 2016.
Weatherford also confirmed that it has closed over 60 operating facilities across North America through the first half of 2015 and over 70 through September 30, 2015.
The company said it plans to close about 90 operating facilities in total by the end of the year.
"The aggregate results of these measures will mitigate the effects of the downturn. Market conditions may continue to remain increasingly challenged and to help offset the decline, we plan to further reduce our cost structure to reflect the current environment," the company said.
Weatherford booked $2.24 billion in third quarter revenue, down 6 percent sequentially and 42 percent from the prior year.
Operating income ticked up by $3 million over the last quarter to $120 million but still down from the $598 million in operating income reported in third quarter of 2014.
Net loss on a non-GAAP basis for the third quarter was $42 million, or a net loss of $0.05 per share, compared to a net loss of $77 million in the second quarter.
GAAP net loss for the third quarter of 2015 was $170 million, or a net loss of $0.22 per share.
Weatherford took $128 million in after-tax charges in the third quarter that included $40 million of costs mostly related to severance and facility closures tied to the company's 2015 cost reduction plan.
North American revenue jumped 2 percent sequentially to $824 million on an operating loss of $54 million, an improvement over the $92 million operating loss booked last quarter but still down from $294 million in income earned in the same quarter of last year.
"The revenue performance in the U.S. easily outperformed the reduction in U.S. Land horizontal rig count of 7 percent with market share gains across several product lines," the company said.
Land Drilling Rigs revenue was nearly unchanged from last quarter at $186 million on an operating income of $16 million, a huge 228 percent jump from the previous quarter.
Sequentially, North America and Land Drilling Rigs improved from last quarter, but those improvements were offset by a decline in International revenues.
International revenue tumbled 12 percent from last quarter to $1.22 billion on an operating income of $158 million, down from $205 million last quarter.
Free cash flow from operations in the third quarter increased to $123 million.
The company's full year forecast for capital expenditures was further revised down by another $100 million to $650 million, or 55 percent lower than 2014 levels.
"Counting all of the cost reduction measures we have undertaken in 2014 and 2015, by the end of this year, we will have generated total cost savings of $2 billion, of which $600 million is as permanent as it is structural. We believe we can exit this down cycle, as a leaner, de-layered, more efficient and streamlined organization, ready to respond to market needs," Weatherford chairman, president and CEO Bernard J. Duroc-Danner said.
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