Weatherford International Inc. (NYSE: WFT) reported first-quarter 2016 earnings after markets closed Wednesday. The oil field services company posted an adjusted net loss of $0.29 on revenues of $1.59 billion. In the same period a year ago, the company reported a net loss per share of $0.04 on revenues of $2.79 billion. First-quarter results also compare to the consensus estimate for a net loss of $0.22 on revenues of $1.57 billion.
Weatherford said that it has successfully negotiated an amended and restated credit agreement and a term loan agreement totaling $1.651 billion, including a $500 million term loan and a $1.151 billion revolving credit facility. The term loan matures in July 2020 and the revolving credit facility matures in July 2019. These newly negotiated facilities offer financial flexibility over a reasonably long period.
The company also raised $630 million during the first quarter through a new equity offering.
In its outlook statement Weatherford said that during the first quarter it completed 78% of its latest headcount reduction of 6,000, shut down operations at four of nine manufacturing and service facilities planned for closure this year, and closed 26 operating and other facilities in North America.
The company plans to cut another 2,000 jobs and close the other five manufacturing and service facilities and an additional 30 operating and other facilities by the end of 2016. Half the closures will be completed by the end of the second quarter.
Capital spending will drop to $250 million for the year, down 63% compared with 2015 and down 83% compared with 2014.
The consensus analyst estimates for the second quarter call for a net loss of $0.19 per share and revenues of $1.6 billion. For the year, analysts are looking for a net loss per share of $0.81 and revenues of $6.52 billion.
The company’s CEO said:
As we look forward, we believe the long-term fundamentals of our industry remain intact. The steady increase in world energy demand coupled with the acceleration of production decline rates are forcing a balance between supply and demand. Oil prices are beginning to respond to this gradual tightening of the supply-demand balance. This shift is inevitable, given the extreme cuts in both capital and operating spend by our customer base around the world. The work we are doing now will prove the merits of our direction. As a recovery unfolds, our performance will reflect our transformation in all metrics.
Shares closed down about 6.4% at $7.48 on Wednesday and were inactive in premarket trading Thursday. The stock’s 52-week range is $4.95 to $14.90. The consensus price target for the shares was $9.38 before the report.