Weatherford announced at the end of the first quarter that it would fire a total of 10,000 employees, up from a prior total of 8,000. As of the time of the first-quarter report, Weatherford said it had eliminated nearly 6,500 jobs.
None of the items that weighed on first-quarter earnings changed much for the better in the second quarter. The adjusted loss in the second quarter will still have a significant amount for severance costs, a charge for losses due to devaluation of Venezuelan currency, divestiture costs and other charges. Last quarter, these costs totaled $85 million, but they could be less this quarter.
Weatherford said earlier that it expected the 10,000 firings to be completed by the end of the second quarter and that annualized savings of $640 million are expected. The company planned to close seven manufacturing facilities this year, including four in the second quarter. Other shutdowns and consolidation of the company’s operating facilities were also planned by the end of 2015.
North American revenues fell 34% sequentially in the first quarter, and that is unlikely to improve, given the continuing cuts to rig counts during the second quarter. International revenues were down 17% sequentially in the first quarter as well. That number, too, is unlikely to improve much.
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Hope springs eternal, apparently, as the stock traded up almost 1.1% in the early afternoon Tuesday, at $11.23 in a 52-week range of $9.40 to $24.88. The consensus price target on the stock is $15.85.
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