Weatherford Intl., Ltd. (WFT) Tops Q4 EPS by 1c

Late Wednesday, Weatherford Intl., Ltd. (NYSE: WFT) reported Q4 EPS of $0.32, $0.01 better than the analyst estimate of $0.31. Revenue for the quarter came in at $3.73 billion versus the consensus estimate of $3.89 billion.

Bernard J. Duroc-Danner, Chairman of the Board, President and Chief Executive Officer, stated, "We complete 2014 having successfully achieved many of the objectives we set for ourselves a year ago. With a clear and disciplined strategy along with a highly committed management team and group of employees, we generated non-core divestiture proceeds of over $1.7 billion, significantly exceeding our target of $1.0 billion, thereby de-risking the Company substantially, ahead of a cyclically challenged year. We also significantly lowered our cost structure, achieving our goal of $500 million in annualized pre-tax savings. We showed progression on key operating and financial metrics, and we emerge a stronger and leaner company.

With a capable and focused team, we are ready to react swiftly to a dramatically changing landscape. We will adjust to a new reality by focusing on cash and cost, and re-direct the Company's focus externally. We have a clear view of the additional measures needed to guide our Company as well as the intensity, focus and experience to navigate through the present environment."

Outlook

Due to the quickly changing market conditions, we are aligning and reducing our cost as well as organizational structures to match the new environment. As a result, we will have a leaner structure and a tighter organization. We have commenced a reduction-in-force exercise targeting 5,000 positions, of which more than 85% are located in the Western Hemisphere. The headcount reduction is expected to be complete by the end of the first quarter of 2015, resulting in expected annualized savings of over $350 million. Weatherford is also offering a Voluntary Separation Opportunity Program to eligible employees as part of the recognized need to reduce our employee workforce. The focus is on both operating and support positions. In addition, we launched a procurement savings initiative in the last quarter of 2014 designed to achieve $300 million of annualized savings over the next two years. Over the next few quarters, we will review and adjust our direct and structural cost base further.

During the upcoming year, our focus will be to generate positive free cash flow from operations, despite challenging industry conditions. We expect our cost actions, a reduction in capital expenditures by $550 million to $900 million in 2015 and a positive contribution from working capital balances to more than offset any reduction in earnings.

Bernard J. Duroc-Danner, Chairman, President and Chief Executive Officer commented, "We will focus the entire organization on ensuring we are cash flow positive in 2015. This means that for every dollar of revenue we lose due to reduced activity and pricing, we will make up for it in cost, capital expenditure and working capital reductions. Our team will be focused on swift market responsiveness. The joint effect of driving our technologies and optimizing our cost structure will support our customers' priorities. We enter 2015 with strong core businesses, a de-risked financial position and an organization focused on working closely with our customers. We expect to emerge from this down cycle much leaner and stronger than we were going into it."

For earnings history and earnings-related data on Weatherford Intl., Ltd. (WFT) click here.

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