UPDATE 1-Weatherford takes $100 mln charge for probe settlement

Wed Jul 25, 2012 3:54am IST

Related Topics

Stocks

   

July 24 (Reuters) - Oilfield services company Weatherford International Ltd on Tuesday posted a rise in pre-tax quarterly earnings despite a $100 million charge for its estimated settlement with the U.S. government over its past work in sanctioned countries.

The charge puts a figure to one part of a multi-agency U.S. probe that has been running for five years. There have been investigations of the company's part in Iraq's oil-for-food program, as well as of its past operations in sanctioned countries such as Sudan and Iran, Weatherford has said.

The $100 million is an estimate for the potential settlement only regarding sanctioned country allegations, the company said. "But the matter remains unsettled, and the actual loss could be more or less," Weatherford said in a statement.

According to quarterly Weatherford filings, The Department of Justice and Securities and Exchange Commission are also investigating its Foreign Corrupt Practices Act (FCPA) compliance and the embezzlement of $175,000 in payments to government officials in Europe.

Late on Tuesday, Weatherford reported a pre-tax profit of $205 million, up from $157 million a year before. Excluding the $100 million and two other one-off items, pre-tax income was $276 million.

Revenue increased 24 percent to $3.7 billion, edging the average estimate of $3.6 billion on Thomson Reuters I/B/E/S.

The company, now based in Switzerland, is reporting earnings on a pre-tax basis because it is still working through the "material weakness" in its internal controls over tax reporting.

"Weatherford has committed its full resources to address our income tax accounting issues as quickly and as thoroughly as possible," Chief Executive Bernard Duroc-Danner said.

Larger rivals Schlumberger Ltd, Halliburton Co and Baker Hughes Inc all beat expectations with quarterly earnings.

FILED UNDER: