Weatherford International(US:WFRD)2022-10-25 16:00Financial Performance - Consolidated revenues for the three and nine months ended September 30, 2022, were $1.1 billion and $3.1 billion, representing increases of 19% and 16% year-over-year, driven by increased demand across all segments [78]. - Total revenues for the three months ended September 30, 2022, were $1.12 billion, an increase of $175 million or 19% compared to $945 million in the same period of 2021 [92]. - Segment revenues for Drilling and Evaluation (DRE) were $348 million for the three months ended September 30, 2022, up $70 million or 25% year-over-year [93]. - Well Construction and Completions (WCC) revenues reached $391 million for the three months ended September 30, 2022, an increase of $46 million or 13% compared to the same period in 2021 [94]. - Production and Intervention (PRI) revenues were $357 million for the three months ended September 30, 2022, reflecting a $65 million or 22% increase year-over-year [95]. - Segment adjusted EBITDA for the three months ended September 30, 2022, was $229 million, up $37 million or 19% from $192 million in the same period of 2021 [97]. - DRE segment adjusted EBITDA margins improved to 24.4% for the three months ended September 30, 2022, compared to 20.1% in the same period of 2021, an increase of 430 basis points [98]. Cost and Expenses - Cost of products and services for the same periods were $775 million and $2.2 billion, reflecting increases of $89 million (13%) and $214 million (11%) year-over-year, with costs as a percentage of revenues improving to 69% and 71% from 73% and 75% in the prior year [79]. - Selling, general, administrative, and research and development costs were $224 million and $641 million, up 14% and 4% year-over-year, with these costs as a percentage of revenues improving to 20% and 21% from 21% and 23% in the prior year [80]. Market Conditions - Average oil prices for WTI and Brent were $93.18 and $100.72 per barrel for the three months ended September 30, 2022, compared to $70.62 and $73.47 in the same period of 2021, indicating significant price increases [75]. - Average natural gas prices at Henry Hub were $7.99 per million British thermal units for the three months ended September 30, 2022, compared to $4.36 in the same period of 2021, reflecting a substantial rise [75]. - Rig count in North America increased to 960 for the three months ended September 30, 2022, from 647 in the same period of 2021, while international rig count rose to 857 from 772 [77]. Future Outlook - The company anticipates continued revenue growth for the full year 2022, driven by improving customer activity levels and positive macroeconomic conditions [68]. - Long-term energy demand is expected to rise, necessitating more advanced technology from the energy service industry, with the company focused on delivering cost-efficient solutions to meet customer needs [72]. - The company aims to deliver innovative energy services that integrate advanced digitalization and proven technologies to maximize value and return on investment [61]. Cash Flow and Liquidity - Total cash provided by operating activities was $156 million for the nine months ended September 30, 2022, compared to $234 million in the same period of 2021 [106]. - Cash used in investing activities was $22 million for the nine months ended September 30, 2022, primarily for capital expenditures of $83 million [108]. - Cash used in financing activities was $89 million for the nine months ended September 30, 2022, which included $62 million for repayments of long-term debt [110]. - As of September 30, 2022, the company had cash and cash equivalents of $933 million, compared to $951 million at December 31, 2021 [104]. - The company anticipates ongoing cash requirements for capital expenditures, working capital, interest payments, and restructuring costs as business activity rises [116]. - The company has approximately $163 million in cash and cash equivalents that cannot be immediately repatriated due to regulations in various countries [119]. Debt and Financing - The company's outstanding debt included $250 million in Exit Notes due 2024, $500 million in 2028 Senior Secured Notes, and $1.6 billion in 2030 Senior Notes [117]. - The company expects to make $213 million in interest payments in 2022, with approximately $198 million in annual interest payments until the maturity of long-term debt [118]. - As of September 30, 2022, the company had approximately $163 million in outstanding letters of credit under the LC Agreement, with an availability of $52 million [113]. - The company had surety bonds outstanding of $287 million as of September 30, 2022, which could impact available liquidity if called [127]. - Moody's corporate family rating is B2, while Standard and Poor's ratings are B- for corporate family and senior unsecured notes, with stable outlooks [119]. Impact of External Factors - The company is closely monitoring the impact of the Russia-Ukraine conflict, which has resulted in 6%-7% of total revenues being derived from Russia, posing potential risks to revenue and asset valuations [71].