HOUSTON, Jan. 22 /PRNewswire-FirstCall/ -- BJ Services Company (NYSE:
BJS; CBOE; PCX) today reported net income of $172.2 million for the fiscal
2008 first quarter ended December 31, 2007, or $0.58 per diluted share. The
quarter's diluted earnings per share decreased from the $0.64 per diluted
share reported in the previous quarter and the $0.70 per diluted share
reported in the first quarter of fiscal 2007.
Revenue in the first quarter of fiscal 2008 was $1,285.1 million,
slightly above the $1,279.3 million reported in the previous quarter and up
9% compared to $1,183.9 million reported in the prior year's December
quarter. Operating income for the quarter was $252.6 million, a 12%
decrease compared to $286.2 million for the previous quarter and a 20%
decrease compared to $316.3 million reported in the first quarter of fiscal
2007.
Debt decreased $46.7 million to $624.3 million and cash and cash
equivalents decreased $4.6 million to $53.6 million during the quarter.
Uses of cash during the quarter included capital expenditures of $161.8
million and payment of $14.6 million in dividends.
Commenting on the results, Chairman and CEO Bill Stewart said, "Revenue
in the U.S. and Canada increased both sequentially and year over year,
despite a relatively flat North America rig count, harsh winter storms in a
number of areas in the U.S. and lower pricing in the U.S. and Canada
pressure pumping operations.
"International pressure pumping revenue was down slightly compared to
the previous quarter, as harsh weather conditions and other factors in
certain markets slowed or delayed projects. International operating income
margins were further impacted by equipment mobilization and maintenance
costs, as well as other front-end costs related to projects scheduled to
begin in the second fiscal quarter. As these new projects begin generating
revenue, we expect international operating margins to improve in the second
quarter and the remainder of the fiscal year.
"Our Oilfield Services group results were mixed, with seasonal declines
in the Process and Pipeline Services group and lower Completion Fluids
sales offsetting revenue improvements in Chemical Services, Tubular
Services and Completion Tools, compared to the previous quarter.
"During the second quarter of fiscal 2008, we expect relatively flat
drilling activity with continued pricing pressures in the U.S. market. We
expect improved results in Canada as we enter the winter drilling season,
and we also anticipate increased revenue and improved margins in the
International Pressure Pumping segment. Our Oilfield Services group is
projected to be up slightly in the second quarter as we expect revenue
growth from Completion Tools and Completion Fluids will be partially offset
by continued seasonal decline in our Process and Pipeline Services
business. We are projecting earnings per share for the second fiscal
quarter to be in the range of $0.55 to $0.57."
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
(in thousands except per share amounts)
Three Months Ended
December 31 September 30
2007 2006 2007
Revenue $1,285,065 $1,183,940 $1,279,313
Operating Expenses:
Cost of sales and services 950,450 788,635 910,623
Research and engineering 17,198 15,694 18,532
Marketing 28,832 25,813 28,083
General and administrative 36,630 37,207 37,521
Loss (gain) on long-lived
assets (626) 265 (1,645)
Total operating expenses 1,032,484 867,614 993,114
Operating income 252,581 316,326 286,199
Interest expense (7,862) (8,779) (6,470)
Interest income 474 320 219
Other expense, net (2,711) (2,076) (905)
Income before income taxes 242,482 305,791 279,043
Income taxes 70,298 98,707 89,693
Net income $172,184 $207,084 $189,350
Earnings Per Share:
Basic $0.59 $0.71 $0.65
Diluted $0.58 $0.70 $0.64
Weighted Average Shares
Outstanding:
Basic 292,627 293,024 291,630
Diluted 295,284 296,436 294,510
Supplemental Data:
Depreciation and
amortization $62,766 $45,705 $57,914
Capital expenditures 161,797 146,452 211,029
Debt 624,324 544,737 671,028
Operating Highlights
Following are the results of operations for the three months ended
December 31, 2007, December 31, 2006 and September 30, 2007:
Three Months Ended
December 31 September 30
2007 2006 2007
U.S./Mexico Pressure Pumping
Revenue $662,551 $640,826 $641,846
Operating Income 182,022 252,557 193,285
Operating Income Margins 27% 39% 30%
Canada Pressure Pumping
Revenue $121,346 $111,664 $117,838
Operating Income 16,992 13,407 21,886
Operating Income Margins 14% 12% 19%
International Pressure
Pumping Revenue $288,512 $252,056 $295,003
Operating Income 35,925 40,373 40,646
Operating Income Margins 12% 16% 14%
Oilfield Services Group
Revenue $212,656 $179,394 $224,626
Operating Income 40,033 32,698 52,367
Operating Income Margins 19% 18% 23%
Corporate Revenue $ - $ - $ -
Operating Loss (22,391) (22,709) (21,985)
December Quarter Review
U.S./Mexico Pressure Pumping Services first quarter 2008 revenue of
$662.6 million was 3% higher than both the September 2007 quarter
(sequential) and the December 2006 quarter (year over year), despite
pricing pressure. Holiday delays throughout the U.S. as well as harsh
weather conditions in the Rockies and Mid-West also negatively impacted
operating activity during the quarter. Average active drilling rigs for
U.S./Mexico was unchanged from the previous quarter, while showing a 4%
improvement year over year. Operating income margins for U.S./Mexico
decreased to 27% from 30% in the previous quarter and from 39% in the same
quarter last year, primarily due to price declines for our products and
services.
Canada Pressure Pumping Services first quarter 2008 revenue of $121.3
million increased 3% sequentially and 9% year over year. Activity levels
continue to remain relatively low in the region. Sequentially, Canadian
average rig count increased 2% and year over year, average rig count for
the quarter declined 19%. Operating income margin for Canada decreased to
14% from 19% in the previous quarter due to lower pricing as well as gains
on asset sales in the previous quarter. Year over year, operating income
margins improved from 12% reported in the prior year, primarily as a result
of cost reduction measures that were implemented in the second half of
fiscal 2007.
International Pressure Pumping Services first quarter 2008 revenue of
$288.5 million decreased 2% sequentially with average active drilling rig
levels unchanged for the same period. Revenue compared to the same quarter
last year increased 14% with average active drilling rigs up 7%. Revenue
performance by region is as follows:
Region Sequential Year Over Year
Europe/Africa 2% -10%
Middle East 4% 47%
Asia Pacific -1% 22%
Russia -22% -32%
Latin America -6% 25%
Total -2% 14%
Sequential revenue contributions from Middle East and Europe/Africa
operations during the quarter were more than offset by lower revenue from
our Latin American and Russian operations. In the Middle East, higher
activity in Kazakhstan and improved utilization with the two new vessels in
India was partially offset by lower activity in Saudi Arabia. Europe/Africa
benefited from increased activity in the Netherlands and the U.K. which was
almost entirely offset by lower revenue in Norway. Revenue from our Russia
operations was lower sequentially due to lower activity and lost work days
due to extreme cold weather. Latin America showed a decline, specifically
in Brazil, due to non-recurring product sales in the previous quarter as
well as lower revenue from our stimulation vessel, the Blue Angel, as the
vessel transitions onto a new contract.
Our Middle East, Latin American and Asia Pacific operations led the
segment's year over year increase in revenue. The Middle East revenue
growth was primarily due to the introduction of two stimulation vessels
into the India market during the previous quarter, while our Latin American
region had significant activity increases in Brazil, Argentina and Peru.
The increase in the Asia Pacific region was largely attributable to the
start up of new projects in Australia and increased activity levels in
China. In Europe/Africa, the transfer of a stimulation vessel from the
North Sea to India accounted for almost the entire decline in revenue.
Excluding the impact of the vessel operations, Europe/Africa revenue
increased 1% year over year. In Russia, declines in activity and
redeployment of assets into other markets accounted for the decline in
revenue.
Operating income margins for International Pressure Pumping were 12% in
the first quarter of fiscal 2008, compared to 14% reported in the previous
quarter and 16% reported in last year's December quarter. Harsh weather in
the North Sea, Russia and parts of Asia Pacific contributed to the margin
decline. In addition, we experienced temporary delays in a number of
projects and front-end mobilization and other costs associated with new
projects in parts of Latin America, Russia and the Asia Pacific, some of
which have already begun generating revenues in the second quarter.
Oilfield Services Group first quarter 2008 revenue of $212.7 million
decreased 5% sequentially and increased 19% year over year.
Division Sequential Year Over Year
Tubular Services 5% 11%
Process & Pipeline Services -13% 51%
Chemical Services 11% 26%
Completion Tools 4% 23%
Completion Fluids -22% -33%
Total -5% 19%
Sequentially, our Process and Pipeline Services business was negatively
impacted by normal seasonal slowdowns, while our Completion Fluids group
showed a decline in revenue due to business mix and lower Gulf of Mexico
activity. The Chemical Services revenue improvement was due to increased
domestic activity and higher capillary services revenue.
Year over year all of our operating segments, except Completion Fluids,
showed improved revenues. Process and Pipeline Services revenue increased
51% year over year, due to increased activity in the Europe/Africa and U.S.
operations. Chemical Services also showed improved revenue largely due to
increased capillary services activity. Completion Tools improved year over
year due to continued expansion into international markets. The decline in
revenue from Completion Fluids was primarily the result of lower U.S.
deepwater activity.
The Oilfield Services Group operating income margin for the quarter was
19%, down from 23% in the previous quarter and up from 18% reported in last
year's December quarter. The sequential decline was due primarily to the
seasonal decline in revenue from our Process and Pipeline Services business
and lower domestic Completion Fluids activity. Year over year, all product
lines, with the exception of Completion Fluids, reported improved operating
income margins.
Consolidated Geographic Highlights
The following table reflects the percentage change in consolidated
revenue by geographic area for the December 2007 quarter compared to the
September 2007 quarter and the December 2006 quarter. The information
presented is based on our combined service and product line offering by
geographic region.
Geographic Sequential Year Over Year
U.S. 2% 5%
Canada 3% 7%
Total 2% 5%
Latin America -9% 11%
Europe/Africa -7% 5%
Russia -21% -30%
Middle East 12% 40%
Asia Pacific 3% 35%
Total 0% 9%
Non-GAAP Financial Measures
A non-GAAP financial measure is a numerical measure of a registrant's
historical or future financial performance, financial position or cash
flows that 1) excludes amounts, or is subject to adjustments that have the
effect of excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP in the
statement of income, balance sheet, or statement of cash flows, or 2)
includes amounts, or is subject to adjustments that have the effect of
including amounts, that are excluded from the most directly comparable
measure so calculated and presented.
Any unexpected disclosures of non-GAAP financial measures discussed on
the call will be posted on our website as soon as possible after the
disclosure.
Conference Call
The Company will hold a conference call following this earnings
release. The call will take place at 9:00 a.m. Central Time.
To participate in the conference call, please call 913/981-5530, 10
minutes prior to the conference call start time and give the conference
code number 1049581. If you are unable to participate, the conference call
will be available for playback three hours after conclusion of the
conference call. The playback number is 719/457-0820 and the replay entry
code is 1049581. Playback will be available for five days.
The conference call will also be available via real-time webcast at
http://www.bjservices.com. Playback of the webcast will be available
following the conference call.
This news release contains forward-looking statements that anticipate
future performance such as the Company's prospects, expected revenue, and
expenses and profits. These forward-looking statements are based on
assumptions that may prove to be inaccurate, and they are subject to risks
and uncertainties that may cause actual results to differ materially from
expected results. These risk factors include, without limitation, general
global business and economic conditions, drilling activity and rig count,
pricing volatility for oil and gas, reduction in demand for our services
and products, risks from operating hazards such as fire, explosion and oil
spills, unexpected litigation for which insurance and customer agreements
do not provide complete protection, potential adverse results from our SEC
and DOJ investigations, changes in exchange rates and declines in the U.S.
dollar, and risks associated with our international operations, including
potential instability and hostilities. This list of risk factors is not
intended to be comprehensive. More extensive information concerning risk
factors may be found in our public filings with the Securities and Exchange
Commission.
BJ Services Company is a leading provider of pressure pumping and other
oilfield services to the petroleum industry.
(NOT INTENDED FOR DISTRIBUTION TO BENEFICIAL OWNERS)
SOURCE BJ Services Company
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Related links:
http://www.bjservices.com
CONTACT:
Jeff Smith of BJ Services Company,
+1-713-462-4239
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