HOUSTON, April 26 /PRNewswire-FirstCall/ -- BJ Services Company
(NYSE: BJS; PCX; CBOE) reported record earnings of $0.66 per diluted share for
its second fiscal quarter ended March 31, 2005, up 47% from the prior year's
earnings of $0.45 per diluted share.
Financial Results
(in millions, except per share amounts)
3 Months Ended
03/31/05 12/31/04 03/31/04
Revenue $795.9 $737.8 $647.1
Net Income $109.6 $95.0 (A) $73.3
Diluted Earnings $0.66 $0.58 (A) $0.45
Per Share
(A) Includes $9.0 million profit before taxes recorded in other income
for the recovery of misappropriated funds.
Sequentially, consolidated revenue for the quarter increased 8%, with
U.S./Mexico Pressure Pumping Services up 4%, International Pressure Pumping
Services up 16% and Other Oilfield Services up 5%. Compared to prior year's
second quarter, consolidated revenue increased 23%, with U.S./Mexico Pressure
Pumping Services increasing 31%, International Pressure Pumping Services
increasing 14%, and Other Oilfield Services up 21%.
Operating income margins during the quarter were 20.2%, up from 17.6%
reported in the previous quarter and up from 17.1% reported in last year's
second quarter. Improved operating margins, sequentially and year over year,
were the result of positive contributions from all business segments.
Capital spending was $77.7 million for the quarter. Year to date spending
is $132.6 million, in line with planned 2005 capital spending of $290 million.
The Company purchased $37.8 million of its common stock during the quarter at
an average price of $48.83 per share and has authorization remaining to
purchase up to $209.6 million in stock. Cash plus short term investments, as
of March 31, 2005 was $653.9 million, which exceeded total debt by
$152.0 million at March 31, 2005.
On March 25, 2005 the Company called for redemption of all of its
outstanding Convertible Senior Notes due 2022. The redemption date was
April 25, 2005 with an aggregate redemption price of $422.4 million. The
redemption of the notes was funded with cash.
U.S./Mexico Pressure Pumping Services
U.S./Mexico Pressure Pumping Services revenue increased 4% sequentially,
as a result of improved pricing and higher drilling activity in the U.S. The
combined U.S. and Mexico average drilling rig count increased 3%. Operating
income margins for U.S./Mexico improved to 30% from 29% reported in the
previous quarter.
Compared to the second quarter of the prior year, revenue in U.S./Mexico
increased 31%, on the strength of a 14% combined average drilling rig count
increase for the U.S. and Mexico and improved pricing in the U.S. market.
U.S./Mexico operating income margins were 25% in the prior year's quarter.
International Pressure Pumping Services
International Pressure Pumping Services revenue increased 16% sequentially
primarily from a 24% revenue increase in Canada. International revenue
excluding Canada was up 10% sequentially, on the strength of activity
increases in the North Sea led by Norway and the U.K., slightly offset by a
decrease in revenue from the Company's stimulation vessel in the North Sea.
Russia also experienced improved revenue, due to increased fracturing
activity. International Pressure Pumping Services operating margins were 16%,
up from 13% reported in the previous quarter, primarily resulting from the
sequential increase in Canadian activity.
Year over year, International Pressure Pumping Services revenue was up
14%. Canadian revenue improved 12%. International revenue excluding Canada
was up 16% with each region showing improvement. North Sea revenue was up
36%, despite a 50% reduction in market activity for the Company's stimulation
vessel. Revenue in the Middle East increased 24% primarily from increased
activity in India and Bangladesh. Argentina and Russia also contributed to
the increase in revenue. Operating margins for International Pressure Pumping
Services remained flat year over year.
Other Oilfield Services
Revenue from the Company's Other Oilfield Services (completion fluids,
completion tools, process and pipeline services, casing and tubular services
and production chemical services) increased 5% sequentially. Operating income
margins improved to 12% from 6% reported in the previous quarter. All
services experienced increases in revenue sequentially, except Process and
Pipeline Services which experienced a normal seasonal decline.
Compared to the second quarter of the prior year, revenue for these
services increased 21%, with all service lines showing revenue improvement.
Operating income margins of 12% for the quarter were higher than the 8%
reported for the same quarter last year. Each of the service lines
contributed to the improved operating income margins year over year.
CEO Stewart Comments
Chairman and CEO Bill Stewart commented, "Strong drilling activity in
North America along with improving markets in the North Sea and Middle East
contributed to record earnings for the quarter.
"We continue to remain optimistic that worldwide activity will remain
strong. We have also planned for a normal spring breakup in Canada. As a
result we are forecasting earnings for the June quarter in the range of
$0.57 - 0.60 per diluted share. We now expect our 2005 fiscal year earnings
to be in the range of $2.45 - 2.55 per diluted share."
Geographic Highlights
The following table reflects the percentage change in the Company's
consolidated revenue by geographic area for the March 2005 quarter compared to
the December 2004 quarter (sequential) and the March 2004 quarter (year over
year). The information presented is based on the Company's combined service
and product line offering by geographic region.
Geographic Sequential Year Over Year
U.S. 7 % 35 %
Canada 24 % 14 %
10 % 29 %
Latin America (includes Mexico) -8 % -6 %
Europe/Africa 13 % 25 %
Russia 19 % 31 %
Middle East 8 % 27 %
Asia Pacific -6 % -4 %
9 % 23 %
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.
The Company anticipates utilizing a non-GAAP financial measure in today's
earnings release conference call -- operating income incremental margin.
Operating income incremental margin is computed by utilizing GAAP numbers. It
is calculated by dividing the change in operating income by the change in
revenue. Management believes incremental margins provide useful information
to investors as a measure of earnings growth. The computation is posted on
the Investors section of our website. 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 is scheduled to report second quarter fiscal 2005 earnings on
Tuesday, April 26, 2005 and will hold a conference call following the earnings
release. The call will take place at 9:00 a.m. Central Time, following the
release of earnings scheduled for approximately 8:15 a.m. Central Time.
To participate in the conference call, please call 913/981-4912,
10 minutes prior to the conference call start time and give the conference
code number 4524032. 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
4524032. Playback will be available for three 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.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
3/31/05 3/31/04 3/31/05 3/31/04
(In thousands except per share data)
Revenue $795,863 $647,060 $1,533,645 $1,247,859
Operating Expenses:
Cost of sales and services 573,593 484,106 1,123,679 941,836
Research and engineering 13,083 11,828 25,545 22,333
Marketing 22,170 20,133 43,845 39,430
General and administrative 26,218 20,027 48,701 37,908
Loss on long-lived assets 392 550 1,330 928
Total operating expenses 635,456 536,644 1,243,100 1,042,435
Operating income 160,407 110,416 290,545 205,424
Interest expense (3,790) (4,144) (7,758) (8,346)
Interest income 3,609 898 6,572 1,718
Other income/(expense), net (282) (100) 9,319 (596)
Income before income taxes 159,944 107,070 298,678 198,200
Income taxes 50,390 33,806 94,091 63,424
Net income $109,554 $73,264 $204,587 $134,776
Earnings Per Share:
Basic $0.68 $0.46 $1.26 $0.85
Diluted $0.66 $0.45 $1.24 $0.83
Weighted Average Shares
Outstanding:
Basic 162,300 159,474 162,358 159,165
Diluted 164,858 163,229 164,981 162,583
Supplemental Data:
Depreciation and
amortization $32,865 $31,268 $65,230 $61,962
Capital expenditures 77,668 45,280 132,607 83,401
Debt 501,918 508,443
Segment Data:
U.S./Mexico Pressure
Pumping Revenue 389,373 297,556 764,826 581,998
Operating Income 116,808 74,206 224,532 140,413
International Pressure
Pumping Revenue 284,678 248,766 530,823 469,975
Operating Income 45,518 39,160 76,588 64,359
Other Oilfield Services
Revenue 121,611 100,738 237,632 195,886
Operating Income 14,497 8,561 20,926 20,688
Corporate Revenue 201 297 364 538
Operating Loss (16,416) (11,511) (31,501) (20,036)
This press 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, 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:
Trey Whichard of BJ Services Company,
+1-713-462-4239
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