Weatherford International(US:WFRD)2025-10-22 20:31Financial Performance - Revenues for the three and nine months ended September 30, 2025, were $1.2 billion and $3.6 billion, respectively, representing a 13% decrease compared to $1.4 billion and $4.2 billion for the same periods in 2024[89]. - Operating income for the three and nine months ended September 30, 2025, was $178 million and $557 million, reflecting a 27% and 25% decrease year-over-year, respectively[91]. - Total revenue for the three months ended September 30, 2025, was $1,232 million, a decrease of $89 million or 7% compared to $1,321 million in the same period of 2024[102]. - For the nine months ended September 30, 2025, total revenue was $3,629 million, a decrease of $543 million or 13% compared to $4,172 million in the same period of 2024[104]. - The overall operating income for the nine months ended September 30, 2025, was $557 million, compared to $740 million in the same period of 2024[104]. Cost and Expenses - Cost of products and services for the three and nine months ended September 30, 2025, was $844 million and $2.5 billion, down 8% and 7% compared to $917 million and $2.7 billion in 2024[92]. - Selling, general, administrative and research and development costs were $196 million and $580 million for the three and nine months ended September 30, 2025, down 17% and 19% year-over-year[93]. - DRE segment revenue decreased by $89 million or 20% year-over-year to $346 million, primarily due to lower activity in drilling-related services[110]. - WCC segment revenue decreased by $41 million or 8% year-over-year to $468 million, with approximately 60% of the decrease attributed to lower activity in cementation products[114]. - DRE segment adjusted EBITDA for the three months ended September 30, 2025, was $83 million, down $28 million or 25% from $111 million in the same period of 2024[113]. - WCC segment adjusted EBITDA for the three months ended September 30, 2025, was $125 million, a decrease of $26 million or 17% compared to $151 million in the same period of 2024[114]. - WCC segment adjusted EBITDA was $125 million and $371 million for the three and nine months ended September 30, 2025, representing decreases of 17% and 11% compared to $151 million and $416 million for the same periods in 2024[117]. - PRI revenues were $326 million and $987 million for the three and nine months ended September 30, 2025, down 12% and 9% from $371 million and $1,088 million in 2024[119]. - The adjusted EBITDA margin for the PRI segment was 18.1% and 18.6% for the three and nine months ended September 30, 2025, down from 22.4% and 22.2% in 2024, reflecting a decrease of 427 basis points and 351 basis points respectively[122]. Market Conditions - The company experienced a year-over-year revenue decline primarily due to a softening market, impacting all segments and geographies[90]. - Approximately 85% of the revenue decrease in the third quarter was from the Latin America region, impacting both DRE and WCC segments[111]. - The third quarter revenue decline was primarily due to a 50% impact from intervention services and a 45% impact from drilling tools and pressure pumping[120]. - The average oil price for WTI was $65.74 per barrel for the three months ended September 30, 2025, down from $76.24 in 2024, while Brent oil price was $68.97, down from $79.84[84]. - The average rig count in North America decreased to 718 in the three months ended September 30, 2025, from 796 in 2024, and the international rig count decreased to 1,080 from 1,151[86]. Cash Flow and Investments - Cash provided by operating activities was $408 million for the nine months ended September 30, 2025, compared to $543 million in 2024, primarily due to decreased revenue and slower payments from a major customer[134]. - Cash used in investing activities was $82 million for the nine months ended September 30, 2025, with $175 million for capital expenditures, partially offset by $97 million from the sale of the pressure pumping business in Argentina[135]. - Cash used in financing activities was $277 million for the nine months ended September 30, 2025, primarily for share repurchases of $94 million and debt repayments of $80 million[137]. - As of September 30, 2025, the company had cash and cash equivalents of $967 million and $64 million in restricted cash, compared to $916 million and $59 million at December 31, 2024[132]. - The company expects capital expenditures to be 3-5% of revenue over a 12 to 18 month rolling period, with 2025 capital spend projected to remain within this framework[141]. Ratings and Credit - Moody's upgraded the Corporate Family Rating from 'Ba3' to 'Ba2' with a positive outlook[144]. - Standard and Poor's upgraded the issuer credit ratings from 'BB-' to 'BB' with a stable outlook[144]. - Fitch Ratings upgraded the issuer credit ratings from 'BB-' to 'BB' with a stable outlook[144]. Risks and Challenges - The company continues to monitor the impact of U.S. tariffs and trade policies on its operations, with strategies in place to mitigate potential adverse effects[82]. - The company faces various risks including geopolitical tensions, inflationary pressures, and customer payment delays that could impact future results[158]. - As of September 30, 2025, net accounts receivables in Mexico accounted for 37% of total net accounts receivables, with the largest customer representing 34%[145]. - During the nine months ended September 30, 2025, the company received $93 million from third-party financial institutions related to collections from the largest customer in Mexico[146]. - Accounts receivable factoring resulted in sales of $91 million and $234 million for the three and nine months ended September 30, 2025, respectively[148]. Business Transactions - The company reported a gain on the sale of its pressure pumping business in Argentina of $70 million for the nine months ended September 30, 2025[94]. - The company reported a gain on the sale of business amounting to $70 million during the nine months ended September 30, 2025[104]. - The Credit Agreement was amended to increase the total commitment amount from $720 million to $1 billion as of September 18, 2025[153]. - As of September 30, 2025, the company had zero borrowings under the Credit Agreement and $255 million in performance letters of credit outstanding[154]. - Surety bonds outstanding were $503 million as of September 30, 2025, down from $520 million as of December 31, 2024[156].