Feb 27 (Reuters) - Oilfield services company Weatherford International Ltd said on Wednesday the devaluation of Venezuela’s currency would cost it $60 million in the first quarter, for which it is already forecasting lower-than-expected profits.
The Venezuela loss for Weatherford was greater than the combined impact on Baker Hughes Inc and Halliburton Co - bigger rivals with less exposure to the country, which this month devalued the bolivar by 32 percent.
Weatherford said it would treat the after-tax loss as an excluded item, while it gave a first-quarter earnings per share estimate of 16 to 18 cents per share. Analysts had been expecting first-quarter profit of $159 million, or 20 cents per share, according to the average on Thomson Reuters I/B/E/S.
Late on Tuesday, Weatherford reported an overall loss for the fourth quarter due to the impact of Iraqi contracts and the cost of a long-running tax remediation effort.
The company said the tax remediation should be done by the end of 2013, though most of the work was now complete on an issue that has led to back-tax charges for the past five years. The company first reported $500 million in tax errors in March 2011, followed by hundreds of millions more since then.
“We have ended a gruelling two-year process - and gruelling is not an overstatement, it’s probably an understatement - of tax introspection,” Chief Executive Bernard Duroc-Danner said on a conference call with analysts on Wednesday.
Sterne Agee analyst Stephen Gengaro was encouraged by the positive free cash flow in “another messy quarter,” for which revenue beat his expectations thanks to good performances from Latin America and its Middle East/North Africa/Asia division.
Duroc-Danner also said he hoped to put to rest in 2013 more than five years of various government investigations of the company. Last July, Weatherford took a $100 million charge for a settlement with the U.S. government over the company’s past work in sanctioned countries such as Sudan and Iran.
There have also been probes of its part in Iraq’s oil-for-food program, while it has disclosed that the Department of Justice and Securities and Exchange Commission are investigating its Foreign Corrupt Practices Act compliance and the embezzlement of $175,000 in payments to government officials in Europe.