Weatherford International(US:WFRD)2023-07-25 16:00Revenue Performance - Revenues for the three and six months ended June 30, 2023, were $1.3 billion and $2.5 billion, representing increases of 20% and 23% compared to $1.1 billion and $2.0 billion for the same periods in 2022[72]. - Product revenues increased by 18% and service revenues increased by 21% year-over-year in the second quarter, with Drilling and Evaluation, Well Construction and Completions, and Production and Intervention contributing 37%, 27%, and 10% to the revenue increase, respectively[72]. - Approximately 80% of the revenue increase was attributed to higher customer demand driven by increased investment in oil and gas production capacity globally, consistent with a 9% and 12% year-over-year increase in global rig counts for the three and six months ended June 30, respectively[73]. - Total revenues for Q2 2023 were $1,274 million, a 20% increase from $1,064 million in Q2 2022, and $2,460 million for the first half of 2023, up 23% from $2,002 million year-over-year[88]. Cost and Expenses - Cost of products and services for the three and six months ended June 30, 2023, was $847 million and $1.6 billion, reflecting increases of 12% and 14% compared to $756 million and $1.4 billion in the same periods of 2022[76]. - Selling, general, administrative, and research and development costs were $225 million and $441 million for the three and six months ended June 30, 2023, representing increases of 3% and 6% compared to $218 million and $417 million in the same periods of 2022[77]. - Interest expense, net decreased to $31 million and $62 million for the three and six months ended June 30, 2023, from $48 million and $96 million in the same periods of 2022, primarily due to reduced long-term debt[78]. Profitability - Operating income for Q2 2023 was $201 million, a 93% increase from $104 million in Q2 2022, and $386 million for the first half of 2023, up 216% from $122 million year-over-year[88]. - DRE segment adjusted EBITDA margin improved to 26.9% in Q2 2023 from 21.8% in Q2 2022, and to 27.9% in the first half of 2023 from 21.0% year-over-year[92]. - WCC segment adjusted EBITDA margin increased to 24.8% in Q2 2023 from 17.5% in Q2 2022, and to 23.8% in the first half of 2023 from 18.4% year-over-year[94]. Cash Flow and Financial Position - Cash provided by operating activities was $285 million for the first half of 2023, compared to a cash outflow of $4 million in the same period of 2022[108]. - Cash used in investing activities was $122 million for the first half of 2023, primarily for capital expenditures of $100 million[111]. - As of June 30, 2023, the company had cash and cash equivalents of $787 million, down from $910 million at the end of 2022[106]. - Cash used in financing activities for the six months ended June 30, 2023, was $297 million, primarily for repayments and repurchases of long-term debt ($230 million) and tax remittances on equity awards vested ($54 million)[113]. - The company anticipates sufficient cash from operations and cash on hand to meet both short-term and long-term financial obligations[115]. Market and Economic Factors - The average oil price for WTI was $73.76 per barrel in Q2 2023, down from $108.72 in Q2 2022, while Brent averaged $78.32 per barrel, down from $113.54[67]. - The average natural gas price at Henry Hub was $2.16 per million British thermal units in Q2 2023, significantly lower than $7.48 in Q2 2022[67]. - Revenues from Russia accounted for approximately 6% of total revenues for both the three and six months ended June 30, 2023, and June 30, 2022[70]. Strategic Initiatives - The company expects to continue investing in research and development for newer technologies and improvements to technology platforms[116]. - The company may consider additional Blue Chip Swap transactions in the future to safeguard cash from Argentine inflation and devaluation[119]. - Capital spending for 2023 is projected to be between 4-5% of total year revenues, with operating lease payments expected to be approximately $65 million and finance lease payments around $20 million[118]. Credit and Receivables - As of June 30, 2023, net accounts receivables in Mexico accounted for 28% of total net accounts receivables, up from 21% as of December 31, 2022[122]. - During the three and six months ended June 30, 2023, the company sold accounts receivable balances of $63 million and $109 million, receiving cash proceeds of $61 million and $103 million, respectively[124]. - The company had $385 million of letters of credit outstanding as of June 30, 2023, compared to $395 million as of December 31, 2022[128]. Credit Ratings - The company maintains a stable outlook with credit ratings of B from Standard and Poor's and B2 from Moody's as of June 30, 2023[126].