Weatherford International(US:WFRD)2025-07-23 20:31PART I Financial Statements The company reported decreased Q2 and H1 2025 revenue and operating income, but Q2 net income rose due to tax provisions and a business sale, with stable cash flow and improved equity Condensed Consolidated Statements of Operations Highlights (Unaudited) | (In millions, except per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $1,204 | $1,405 | $2,397 | $2,763 | | Operating Income | $237 | $264 | $379 | $497 | | Net Income Attributable to Weatherford | $136 | $125 | $212 | $237 | | Diluted Income per Share | $1.87 | $1.66 | $2.90 | $3.16 | Condensed Consolidated Balance Sheet Highlights (Unaudited) | (In millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $3,328 | $3,402 | | Total Assets | $5,141 | $5,159 | | Total Current Liabilities | $1,503 | $1,696 | | Total Liabilities | $3,622 | $3,876 | | Total Shareholders' Equity | $1,519 | $1,283 | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | (In millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $270 | $281 | | Net Cash Used in Investing Activities | $(36) | $(115) | | Net Cash Used in Financing Activities | $(230) | $(289) | - In April 2025, the company completed the sale of its pressure pumping business in Argentina for total proceeds of $104 million, recognizing a gain of $70 million30 - During the first six months of 2025, the company repurchased 1.6 million ordinary shares for $87 million and paid $36 million in dividends5152 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management attributes Q2 2025 revenue decline to market softening and lower oil prices, impacting all segments, while maintaining a cautious near-term outlook and strong liquidity despite significant customer concentration in Mexico Industry Trends and Outlook The industry faces headwinds from lower oil prices and reduced rig counts, leading management to anticipate continued downward pressure on demand for the remainder of 2025 due to market softening and geopolitical uncertainty Average Commodity Prices | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Oil price - WTI ($/bbl) | $64.63 | $81.71 | | Oil price - Brent ($/bbl) | $68.01 | $84.65 | Average Rig Counts | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | North America | 699 | 738 | | International | 897 | 963 | | Worldwide | 1,596 | 1,701 | - The company anticipates continued downward pressure on demand for its services and products throughout the remainder of 2025 due to a softened market, reduced demand from a key customer in Mexico, and moderated growth in the Middle East120 Consolidated Results of Operations Q2 2025 revenues decreased 14% year-over-year to $1.2 billion, with operating income falling 10% to $237 million, primarily due to Latin America's decline, partially offset by a $70 million business sale gain - Q2 2025 revenue decreased 14% YoY, with product revenues down 13% and service revenues down 15%, seen across all segments, with DRE contributing 46% of the decrease82 - Geographically, the Q2 revenue decrease was led by Latin America, which accounted for 79% of the decline83 - A gain of $70 million was recognized in Q2 2025 from the sale of the pressure pumping business in Argentina86 Results of Operations by Segment All three segments, DRE, WCC, and PRI, experienced year-over-year declines in Q2 2025 revenue and adjusted EBITDA, with DRE most impacted by a 22% revenue drop and 47% EBITDA decrease, primarily due to reduced Latin American activity Segment Performance - Three Months Ended June 30 | Segment (in millions) | Revenue 2025 | Revenue 2024 | % Change | Adj. EBITDA 2025 | Adj. EBITDA 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | DRE | $335 | $427 | (22%) | $69 | $130 | (47%) | | WCC | $456 | $504 | (10%) | $118 | $145 | (19%) | | PRI | $327 | $369 | (11%) | $63 | $85 | (26%) | - The DRE segment's revenue decline was primarily driven by Latin America, which accounted for approximately 80% of the decrease103 - The WCC segment's revenue decrease was mainly due to a decline in completions activity, with Latin America contributing about 60% of the geographic decline107 - The PRI segment's revenue decline was largely due to lower activity in intervention services and pressure pumping, with the sale of the Argentina business being a key factor, and Latin America accounting for about 70% of the geographic revenue decrease111 Liquidity and Capital Resources The company maintains a solid liquidity position with $943 million in cash, funding capital expenditures, share repurchases, debt repayments, and dividends, while noting a significant 30% accounts receivable concentration with its largest customer in Mexico - As of June 30, 2025, cash and cash equivalents were $943 million, with an additional $60 million in restricted cash122 - Primary uses of cash in the first half of 2025 included $87 million in share repurchases, $73 million in debt repayments (including $61 million of 2030 Senior Notes), and $36 million in dividends127 - Net accounts receivable from Mexico represented 33% of the company's total, with the largest customer in that country accounting for 30% of total net outstanding accounts receivables as of June 30, 2025135 Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risk exposure since December 31, 2024 - There have been no material changes in the company's market risk exposure since December 31, 2024149 Controls and Procedures The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting identified during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025151 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls152 PART II – OTHER INFORMATION Legal Proceedings The company is subject to various lawsuits and claims in the normal course of business, with no negative outcome considered probable for current pending litigation - The company is subject to lawsuits and claims arising from its business operations, with further details available in Note 8 of the financial statements49155 Risk Factors There have been no material changes to the company's risk factors since those disclosed in its 2024 Form 10-K - As of June 30, 2025, there have been no material changes in the company's risk factors from those described in the 2024 Form 10-K156 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered equity sales, repurchasing 741,786 ordinary shares for $33.8 million in Q2 2025, with $314 million remaining authorized under its share repurchase program Issuer Repurchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - 30 | 105,162 | $44.68 | | May 1 - 31 | 555,031 | $45.80 | | June 1 - 30 | 81,593 | $44.79 | | Total | 741,786 | $45.53 | - The share repurchase program, announced in July 2024, authorizes up to $500 million in repurchases through June 2027, with approximately $314 million remaining available as of June 30, 2025158 Other Information No director or executive officer adopted or terminated a Rule 10b5-1 trading arrangement during Q2 2025 - No director or executive officer adopted or terminated a Rule 10b5-1 trading plan during the three months ended June 30, 2025161 Exhibits This section lists exhibits filed with the Form 10-Q, including amendments to incentive plans, credit agreements, and CEO/CFO certifications - The report includes several exhibits, such as the Fourth Amended and Restated 2019 Equity Incentive Plan, the Ninth Amendment to the Credit Agreement, and CEO/CFO certifications163