* CEO aims for quality growth, better returns
* $1 billion in asset sales set for 2013
* Shares drop 13.2 percent after third-quarter results
Nov 13 Oilfield services company Weatherford
International Ltd will take a much more
selective approach to expansion after more than a year of
tending to tax problems, its chief executive officer said on
The new focus will be more on returns, CEO Bernard
Duroc-Danner said on a call with analysts. "It is a question of
choosing the growth we are going to go after," he said. "It is
quality growth as opposed to just growth."
This represents a notable change in an industry where the
world's biggest companies have spent years expanding their
capability to provide more services to clients.
"Do we need to be emphasizing as many product lines as we do
with the same degree of both people and capital support?"
Duroc-Danner said. "The answer to that question is no."
He also said that once the tax remediation was complete, he
would turn his attention back to selling about $1 billion in
assets - a plan that originally emerged in 2011.
Late on Monday, the company reported a decline in pretax
earnings for the third quarter and gave a fourth-quarter outlook
below market expectations.
Weatherford shares plunged 13.2 percent to $9.44 in morning
New York Stock Exchange trading.
The company hopes to complete its tax remediation by the end
of this month, drawing a line under a process that has unearthed
hundreds of millions of previously unrecognized costs over the
past few years and proven a distraction for management.
"The chasm between intent and results continues to be too
wide," Simmons & Co analyst Bill Herbert said. "Reading and
dissecting the earnings results will likely lead to the growing
sense of unease and alarm associated with this labyrinthine
Earlier this year, Andy Becnel ended up losing his job as
Weatherford's chief financial officer due to a "material
weakness" in internal tax controls, which first surfaced in
The problem was related to financial reporting on current
taxes payable, certain deferred tax assets and liabilities,
reserves for uncertain tax positions, and income tax expense.
The company has already identified more than $800 million in
additional tax charges for the past five years.
As for asset sales, Weatherford did not specify what it
would sell, but Wells Fargo analysts said last year that they
would be mostly non-oilfield subsidiaries that the company
accumulated through acquisitions over the years.
Duroc-Danner said he believed $1 billion was a "reasonable"
estimate of the value of the sales over the course of next year,
once the tax problems are behind him. "The tax issues took us by
surprise and that has been a major distraction," he said. "Can't
fight more than one war at a time."