Weatherford Cuts Outlook as Revenue Declines Again
Adjusted free cash flow rose 64% sequentially to $139 million despite weaker earnings.
Weatherford International (WFRD) reported a second consecutive sequential revenue decline as weaker Middle Eastern and North American activity weighed on results. The oilfield-services company’s second-quarter revenue fell 4% from the first quarter and 8% from a year earlier to $1.105 billion.
The contraction extended a downturn that began in the first quarter, when revenue dropped 11% sequentially to $1.152 billion from $1.289 billion in the final quarter of 2024. Weatherford slightly reduced its full-year outlook as it anticipated a gradual recovery in Middle Eastern activity.
Operating income declined 13% sequentially and 55% from a year earlier to $107 million, after falling 38% in the first quarter. Net income attributable to Weatherford dropped 64% from the prior quarter and 71% year over year to $39 million, compressing net margin to 3.5% from 9.4%.
Adjusted earnings before interest, taxes, depreciation and amortization decreased 4% sequentially and 12% year over year to $223 million. The adjusted EBITDA margin held nearly flat from the first quarter at 20.2%, following a 235-basis-point contraction from the fourth quarter.
Drilling and Evaluation led the weakness, with revenue falling 9% sequentially to $291 million and adjusted EBITDA declining 19% to $58 million. Lower Middle Eastern managed-pressure-drilling and Wireline activity, along with reduced North American Wireline activity, pushed the segment’s margin down 250 basis points to 19.9%.
Production and Intervention provided the main counterweight. Revenue rose 7% sequentially to $316 million, while adjusted EBITDA increased 30% to $70 million and margin expanded 391 basis points to 22.2%, driven by international Pressure Pumping and North American Artificial Lift activity. Europe, Sub-Sahara Africa and Russia revenue grew 10% sequentially, while Latin America, Middle East/North Africa/Asia and North America each declined.
Cash generation improved even as profitability weakened. Operating cash flow rose 29% sequentially to $175 million, while lower capital spending supported the rebound in adjusted free cash flow. Both cash measures remained below their fourth-quarter levels. Weatherford now expects a significant second-half increase in margin contribution and improved cash conversion.
Weatherford also agreed to acquire NCS Multistage, expanding its well-completions portfolio and targeting at least $15 million in cost savings after integration. The company separately replaced its unsuccessful Texas redomestication plan with a Delaware proposal that it projects will produce $20 million to $30 million in annual cash savings beginning in 2027.