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Weatherford Pre-tax Profit Drops - Update

Swiss oilfield services provider Weatherford International Ltd. (WFT), Monday reported a lower pre-tax profit for the third quarter as increased expenses offset growth in revenues that missed Street estimates.

Weatherford reported third-quarter income before income taxes of $191 million, compared with $270 million last year.

Excluding market adjustments and other items of $73 million, earnings before taxes for the quarter totaled $264 million.

Net revenues for the quarter were $3.82 billion, up 13 percent from $3.37 billion in the prior year. Twenty-three analysts polled by Thomson Reuters expected revenues of $3.89 billion for the quarter.

North America revenue was up 7 percent from last year, despite the lower than anticipated rig count in Canada and pressure pumping pricing declines in the U.S.

International revenues were up 20 percent, mainly on growth in Latin America, and the Middle East/North Africa/Asia regions.

Total costs for the quarter escalated to $3.45 billion from $2.96 billion last year.

Moving forward, Weatherford expects fourth-quarter earnings of about $0.20 per share.

Weatherford also reported a revised preliminary second quarter 2012 loss before taxes of $753 million. Excluding non-cash goodwill charges and other items, earnings before taxes totaled $146 million for the period.

The company earlier reported second-quarter profit before taxes of $205 million.

Weatherford has been restating its previous quarterly results owing to errors in revenue related to a percentage of completion contract in Iraq. It has identified a material weakness in internal controls over its financial reporting.

Although it has implemented additional controls to rectify the issues, the company warned that until the restatement is completed, its estimates of the expected income tax adjustments for 2011 through 2008 and prior years, as well as for the nine months of 2012, are subject to change.

Weatherford is being probed by the U.S. Justice Department as well as the SEC for its participation in the UN oil-for-food program and for its past operations in ostracized nations such as Iran and Sudan.

The company's stock closed Monday at $10.88, up 1.21%, on a volume of 8.4 million shares on the NYSE. In after hours, the stock dropped 0.74%.

by RTT Staff Writer

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