Nov 4 (Reuters) - Oil services company Weatherford on Monday reported higher-than-expected earnings and the finalization of deals with the U.S. government on various longstanding charges that will cost it around $250 million.
The company, which on top of that had to go through a tax remediation leading to hundreds of millions of dollars of extra expenses over the past five years, also named a new chief financial officer, Krishna Shivram.
The U.S. government charges include work in sanctioned countries, Foreign Corrupt Practices Act (FCPA) breaches and violations in the Iraq oil-for-food program. Weatherford stuck with previous estimates of $100 million for the sanctioned countries penalty and $153 million for the latter two issues.
They all stem from probes by the Department of Justice and Securities and Exchange Commission going back to 2007, including one involving the embezzlement of $175,000 in payments to government officials in Europe, according to company filings.
The Swiss company said “definitive agreements” had been reached on all three investigations, subject to approval by the SEC and courts, but gave no more details. Weatherford will host a conference call on Tuesday to discuss its third-quarter results.
The company’s net profit was $22 million, or 3 cents per share, compared with $70 million, or 9 cents per share, a year ago. Revenue was unchanged at $3.82 billion. Excluding one-off charges, it earned 23 cents per share, compared with 21 cents expected on average by analysts on Thomson Reuters I/B/E/S.
Its three larger rivals all reported higher-than-expected quarterly profits. But Weatherford is in the middle of retrenching to its most profitable businesses, a move it aims to complete by the end of 2014.
In a regulatory filing on Monday, the company spelled out in slides its plans to divest businesses with $3.5 billion worth of revenue next year, whereas it will now retain its pressure pumping business - a key part of the U.S. hydraulic fracturing boom.
Half the revenue to go is made up of its land-drilling rig contracting business, which it aims to spin-off with a possible initial public offering. The other businesses to be sold include drilling fluids, pipeline and specialty services, testing and production services, and wellheads, according to the slides.