Weatherford International plc (WFT) reported a narrower loss in the third quarter helped by improved efficiencies and reduced expenses as a result of the transformation processes. The bottom line exceeded analysts’ expectations, while the top line missed consensus estimates.
Net loss narrowed to $199 million or $0.20 per share from $256 million or $0.26 per share last year. Non-GAAP loss was $0.10 per share, lower than the previous year’s loss of $0.22 per share.
The company recorded pre-tax charges of $95 million, which consist of non-cash impairments and asset write-downs from land drilling rigs, restructuring and transformation charges, as well as currency devaluation charges.
Revenue declined about 1% to $1.44 billion. The top line was hurt by lower activity levels in Canada as crude oil differentials expanded, which lowered demand for Completions and Production services and products. This was partially offset by higher revenues from integrated service projects in Latin America. Results in Russia were negatively impacted by foreign exchange rate effects.
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A large part to transitory supply chain and manufacturing inefficiencies as well as continued challenges converting inventories to cash hurt the company, which fell short of its revenue and cash flow goals. Revenue from Western Hemisphere declined 1% and that from Eastern Hemisphere fell 2% year-over-year.
After achieving about 30% of annualized transformation goal, the company said it will reach its $1 billion run-rate improvement target by the end of 2019.
Weatherford said the recent sale of its laboratory services business earlier this month, combined with the previously announced land drilling rigs divestiture, will generate close to $500 million in cash proceeds, which will be used to lower debt.
Shares of Weatherford ended Friday’s regular session down 3.88% at $1.98 on the NYSE. The stock has fallen over 39% in the past year and over 52% in the year so far.