Weatherford cuts additional jobs, misses on revenue

After cutting thousands of jobs earlier this year, Weatherford International Ltd. (NYSE: WFT) now plans to eliminate an additional 3,000 jobs, for a total of 14,000 jobs cut by the end of the year. The additional job cuts will focus on support positions. Weatherford is also closing facilities and cutting its capital expenditure spending.

The company’s full-year CAPEX forecast is now $650 million, down 55% from 2014 levels. Its third-quarter revenue fell 42% year over year to $2.24 billion. Net loss was $170 million, or 22 cents per share. When excluding special items, the net loss was $42 million, or 5 cents per share. Analysts expected a net loss of 11 cents per share and revenue of $2.32 billion.

Following Weatherford’s third-quarter earnings report, Seaport Global Securities analysts commented, “WFT reported a smaller-than-expected adjusted loss of ($0.05) per share versus our and the consensus estimate of ($0.10). Operating results were in line with our forecast, with lower-than-expected revenues offset by better-than-expected margins. The lower-than-expected adjusted loss was driven by Other Income and a higher-than-expected tax benefit. Free cash flow was $123MM, excluding $120MM in litigation settlements, with working capital reductions generating $170MM in cash. Management expects further activity declines in NAM, Latin America and Sub-Sahara activity, with Asia Pacific stabilizing, and continued strength in the Middle East, North Africa and Russia. WFT expects some activity improvement in the back half of 2016 with stronger commodity prices, while pricing is expected to remain weak until 2017.”

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