Factors that Affected Weatherford’s 4Q17 Performance

Revenues from Weatherford International’s (WFT) Western Hemisphere increased 3.1% from 4Q16 to 4Q17. WFT’s Eastern Hemisphere region saw robust revenue growth of ~9.0% during the same period.

The Western Hemisphere segment represents the previous North America and Latin America segments, while the Eastern Hemisphere segment represents the prior MENA/Asia-Pacific segment and Europe/SSA/Russia segment as well as land drilling rig operations.

WFT’s Western Hemisphere region’s operating loss decreased to $35.0 million in 4Q17 compared to its $74.0 million operating loss in 4Q16. However, WFT’s operating loss in the Eastern Hemisphere deepened further to $49.0 million from its $42.0 million operating loss in 4Q16.

WFT comprises 3.1% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES). XES declined 26.0% in the past year compared to a 34.0% decrease in WFT’s stock price during the same period.

All of WFT’s Product and Service Line segments saw revenue growth from 4Q16 to 4Q17. WFT’s Completion segment saw the highest revenue growth of 10.8%, followed by Drilling and Evaluation (increase of 7.1%), Well Construction (increase of 5.9%, and Production (increase of 1.5%.

• increased activity from contract deliveries and sales in the Eastern Hemisphere
• recovery of upstream activity levels in North America
• growth in Completions activity in North America
• realization of savings from cost reduction measures
• market share gains in land markets in the Middle East, Russia, and Continental Europe

• lower upstream activity in Venezuela
• the adverse effect of a change in accounting for revenue with WFT’s customers in Venezuela
• lower margins on year-end product sales out of existing inventory
• continued weakness in offshore markets in the Eastern Hemisphere

Next, we’ll discuss Weatherford International’s returns.