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Mar 31, 2020
Weatherford Q1 2020 Earnings Report
Weatherford's first quarter results were announced, revealing operating improvements amidst a challenging environment.
Key Takeaways
Weatherford International plc reported a GAAP revenue of $1.2 billion for Q1 2020, a 2% sequential decrease and a 10% year-on-year decrease. The company faced a net loss of $966 million, compared to a $5.3 billion net income in Q4 2019 and a $481 million net loss in Q1 2019. Despite these challenges, the adjusted EBITDA grew by 15% sequentially and 39% year-on-year, and the company was free cash flow neutral.
Revenues of $1.2 billion declined 2% sequentially and 7% year-on-year (excluding divestitures).
International revenues declined 1% sequentially and grew 2% year-on-year (excluding divestitures).
North American revenues declined 4% sequentially and 23% year-on-year (excluding divestitures).
Adjusted EBITDA of $178 million grew by 15% sequentially and 39% year-on-year, with associated margins of 15%.
Weatherford
Weatherford
Weatherford Revenue by Geographic Location
Revenue by Geographic Location
North America Revenue
CapyFin.comLatin America Revenue
CapyFin.comME/NA/Asia Revenue
CapyFin.comEurope/SSA/Russia Revenue
CapyFin.com Forward Guidance
Company expects a multi-year dislocation across the industry, with the quickest and deepest impacts in North America, followed by certain international markets such as Europe, Latin America and Sub Saharan Africa.
Positive Outlook
- More than doubled the cost savings actions that were underway going into 2020.
- Implementing a combination of structural reductions.
- Implementing headcount and pay reductions.
- Implementing furloughs and facility closures.
- Implementing capital expenditure reductions.
Challenges Ahead
- Significant acceleration of the disruptions associated with the COVID-19 pandemic.
- Global storage for crude oil will likely reach full capacity, further pressuring crude pricing.
- Forcing producers to shut-in a significant amount of production globally.
- Unclear when a stable oil market will return, as record crude inventories will likely dampen the pace of any recovery.
- Evaluating various alternatives to address the level of the Company’s debt service and expected reductions in borrowing capacity under the ABL Facility.
Revenue & Expenses
Visualization of income flow from segment revenue to net income