Weatherford Q2 earnings miss 40% as Middle East disruptions hit activity

Weatherford International reported Q2 EPS of 55 cents, missing estimates by 40%, as Middle East disruptions weighed on results.

The oilfield services company attributed the earnings decline to geopolitical tensions in the Middle East, lower activity across several markets, a union strike in Norway and reduced operations in Indonesia, according to its earnings release.

Revenue fell 8.2% year over year to $1.11 billion, beating the consensus estimate of $1.06 billion by 3.8%. Adjusted EBITDA dropped 12% to $223 million. The Middle East/North Africa/Asia segment, Weatherford's largest region, posted revenue of $446 million, down 15% from a year earlier. Latin America revenue edged up 1% to $197 million, while Europe/Sub-Sahara Africa/Russia rose 5% to $257 million. North America revenue declined 15% to $205 million.

By segment, Drilling and Evaluation revenue fell 13% to $291 million, Well Construction and Completions slipped 5% to $433 million, and Production and Intervention dipped 3% to $316 million. Operating income plunged 55% to $107 million, and net income fell to $39 million from $136 million a year ago.

Weatherford generated $175 million in operating cash flow, up 37%, and adjusted free cash flow of $139 million, up 76%. The company returned $36 million to shareholders through dividends and buybacks. It ended the quarter with $1.14 billion in cash and a net leverage ratio of 0.34 times.

The company agreed to acquire NCS Multistage in a stock-and-cash deal to expand its completions portfolio and proposed redomiciling from Ireland to Delaware, a move expected to generate $20 million to $30 million in annual cash savings starting in 2027.

For the third quarter, Weatherford forecast revenue of $1.11 billion to $1.16 billion and adjusted EBITDA of $235 million to $265 million, assuming a gradual recovery in the Middle East. For the full year, it expects revenue of $4.54 billion to $4.80 billion and adjusted EBITDA of $951 million to $1.05 billion.

The earnings miss and cautious outlook signal that Middle East instability continues to pressure operations. Investors will watch for signs of regional stabilization and the closing of the NCS Multistage acquisition in coming quarters.

This article is for informational purposes only and does not constitute investment advice.