HOUSTON, July 21 /PRNewswire-FirstCall/ -- BJ Services Company
(NYSE: BJS; PCX; CBOE) reported earnings of $0.79 per diluted share for its
third fiscal quarter ended June 30, 2004, which includes $56 million profit
after taxes for the Halliburton patent infringement award.
Financial Results
(in millions, except per share amounts)
3 Months Ended
6/30/04 3/31/04 6/30/03
Revenue $658.7 $647.1 $546.6
Net Income $129.3 $73.3 $49.5
Diluted Earnings
Per Share $0.79 $0.45 $0.31
Sequentially, consolidated revenue increased 2%. U.S./Mexico Pressure
Pumping Services increased 15%, International Pressure Pumping Services
decreased 23% and Other Oilfield Services increased 24%. Compared to prior
year's third quarter, consolidated revenue increased 21%, with U.S./Mexico
Pressure Pumping Services increasing 27%, International Pressure Pumping
Services increasing 6%, and Other Oilfield Services up 30%.
Operating income margins during the quarter were 16.1%, down from 17.1%
reported in the previous quarter and up from 14.0% reported in last year's
third quarter. Sequentially, the decline in the operating income margin was
primarily due to the seasonal drilling activity decline in Canada. The
improvement year over year was due to favorable margins on activity gains in
the U.S. pressure pumping market, as well as gains in revenue from the
Completion Tools and Completion Fluids businesses.
Capital spending was $55.9 million for the quarter. Cash plus short term
investments, as of June 30, 2004 was $536.9 million, which exceeded total debt
by $38.1 million at June 30, 2004.
U.S./Mexico Pressure Pumping Services
The Company's U.S./Mexico Pressure Pumping Services revenue increased 15%
sequentially, resulting from a U.S. price book increase (effective May 1,
2004) and a 4% combined average drilling rig count increase in the U.S. and
Mexico.
Compared to the third quarter of the prior year, revenue in U.S./Mexico
increased 27%, resulting from a U.S. price book increase (effective May 1,
2004) and a 15% average drilling rig count increase for the U.S. and Mexico
combined. During the third quarter of fiscal 2004, 86% of the U.S. rigs were
drilling for natural gas, a slight increase from the prior year.
International Pressure Pumping Services
International Pressure Pumping Services revenue declined 23% sequentially
primarily due to a 60% revenue decline in Canada. Drilling rig activity in
Canada declined 62% during the third quarter as a result of seasonal spring
break-up. International revenue excluding Canada was up 4% sequentially, led
by increased activity in Russia, the U.K. and India. These increases were
offset somewhat by activity declines in Africa.
Year over year, International Pressure Pumping Services revenue was up
6% led by Canadian revenue improvement of 22%. Although average active
drilling rig count was flat, the Canadian increase in revenue resulted from
favorable job mix, price improvement and positive foreign exchange
translation. International revenue excluding Canada was up 2% year over year
as increases in Russia and India were offset by declines in Africa, Colombia
and Norway.
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) was up 24% sequentially led by Process and
Pipeline Services, Completion Tools and Completion Fluids. Compared to the
third quarter of the prior year, revenue for these services increased 30%,
with all services showing an increase.
CEO Stewart Comments
Chairman and CEO Bill Stewart commented, "During the June quarter,
stimulation activity in the U.S. market remained strong, our Process and
Pipeline Services division experienced a nice rebound from its low seasonal
March quarter and our Completion Tools and Completion Fluids divisions
generated a combined revenue increase of 19%. These improvements contributed
to offset the significant decline in revenue from our Canadian business.
"U.S. activity has increased since the end of our June quarter and our
forecast assumes U.S. activity will continue increasing for the balance of
calendar year 2004. During the September quarter, we estimate rig activity in
the U.S. to average 3-4% higher than the June quarter. The Canadian market is
recovering from its seasonal decline and is expected to show improvement over
last year's September quarter. For these reasons, we believe earnings will be
in the $0.54 to $0.56 range for our fourth fiscal quarter and will be in the
range of $2.16 to $2.18 for the fiscal year ending September 30, 2004."
Geographic Highlights
The following table reflects the percentage change in the Company's
revenue by geographic area for the June 2004 quarter compared to the March
2004 quarter and June 2003 quarter. The information presented is based on the
Company's combined service and product line offering by region.
Geographic Sequential Year Over Year
U.S. 16% 27%
Canada -54% 24%
-2% 26%
Latin America
(includes Mexico) 7% 10%
Europe/Africa 3% -3%
Russia 41% 53%
Middle East 16% 29%
Asia Pacific 5% 7%
9% 11%
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 non-GAAP financial measures in today's
earnings release conference call. The most common non-GAAP financial measure
used by the Company is free cash flow. The reconciliations to the most
comparable GAAP measure are posted on the Investor's section of our website at
http://www.bjservices.com . The required disclosures for these measures were
included in our September 30, 2003 Form 10-K, also posted on 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 has scheduled a conference call today to discuss the results
of today's earnings announcement. The call will begin at 9:00 a.m. Central
Time. To participate in the conference call, please phone 719/457-2604, ten
minutes prior to the start time and give the conference code number 597255.
If you are unable to participate, the conference call will be available for
playback three hours after its conclusion. The playback number is
719/457-0820 and the replay entry code is 597255. 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 for
twelve months following the conference call.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended Nine Months Ended
6/30/04 6/30/03 6/30/04 6/30/03
(In thousands except per share data)
Revenue $658,662 $546,576 $1,906,521 $1,554,280
Operating Expenses:
Cost of sales and
services 498,484 423,210 1,440,320 1,213,974
Research and engineering 11,923 10,606 34,256 30,285
Marketing 20,788 18,976 60,218 54,450
General and administrative 20,133 17,634 58,041 52,956
Loss on long-lived assets 1,117 329 2,045 598
Total operating
expenses 552,445 470,755 1,594,880 1,352,263
Operating income 106,217 75,821 311,641 202,017
Interest expense (3,975) (3,982) (12,321) (11,724)
Interest income 1,279 442 2,997 1,305
Other income/(expense), net 83,604 (275) 83,008 (3,625)
Income before income taxes 187,125 72,006 385,325 187,973
Income tax expense 57,838 22,462 121,262 60,151
Net income $129,287 $49,544 $264,063 $127,822
Earnings Per Share:
Basic $0.80 $0.31 $1.65 $0.81
Diluted $0.79 $0.31 $1.62 $0.79
Weighted Average Shares
Outstanding:
Basic 160,882 158,097 159,735 157,827
Diluted 163,915 161,770 163,034 161,162
Supplemental Data:
Depreciation and
amortization $31,946 $31,894 $93,908 $89,886
Capital expenditures 55,928 50,467 139,329 121,382
U.S./Mexico Pressure
Pumping Revenue 341,692 268,225 923,690 712,363
International Pressure
Pumping Revenue 192,469 182,420 662,444 578,971
Other Oilfield Services
Revenue 124,501 95,931 320,387 262,946
Debt 498,849 496,818
This press release contains forward-looking statements that anticipate
future performance such as the Company's prospects, expected revenues, 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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