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CORRECT (3/2): Weatherford Shares Fall As Tax Accounting Errors Disclosed

("UPDATE: Weatherford Shares Fall As Tax Accounting Errors Disclosed," at 11:05 a.m. EST March 2, mischaracterized Chief Executive Bernard Duroc-Danner's statements regarding the risk of U.S. government inquiry into Weatherford's accounting errors in the 11th paragraph. Duroc-Danner said that the accounting errors had no ties to separate, ongoing investigations by U.S. regulators. The correct version follows: ) (Adds executive comment throughout, updates share price in third paragraph and adds analyst comment in final paragraph.) DOW JONES NEWSWIRES Weatherford International Ltd. (WFT) disclosed errors in its tax accounting late Tuesday that will lead the oilfield-service company to adjust previously reported results by $500 million. On a conference call Wednesday with investors, Chief Financial Officer Andrew Becnel called the mistakes an "embarrassment," the damage of which is "impossible to quantify." Shares, which were up about 40% in the past year through Tuesday's close, plunged 15% premarket. Those losses were reduced somewhat in morning trading with the shares recently down 10.8% to $20.97. The setback comes as Weatherford has seen its core bottom-line results improve in recent quarters as revenue has grown on a recovery in its North American operations. The industry has benefited from a rush of activity targeting resources tapped in shale rock formations. Weatherford, nevertheless, has lagged the sector, as reduced activity in Mexico has weighed on its international business. Weatherford expects the errors to lead to adjustments of $100 million to $150 million to its historical financial statements in each year from 2007 to 2010. In a U.S. securities filing, the Swiss-based company said most of the adjustments involve an error in determining the tax impacts of inter-company amounts and have no impact on previously reported operating cash flow. "Coming on the heels of several messy quarters, these disclosures are likely to call Weatherford's broader accounting and internal controls into question," Deutsche Bank analysts said in a note to clients. Chief Executive Bernard Duroc-Danner said the accounting errors have "absolutely" no ties to separate, ongoing investigations into the company by the U.S. Department of Justice and the Securities Exchange Commission, nor does he expect any tax penalties or fines related to what he characterized as a mistake in calculating the tax rates on dividends moved from one subsidiary to another. "This is an internal mistake," Duroc-Danner said. The company said that the mistake and subsequent review of its accounting practices will delay the filing of its annual financial report with U.S. securities regulators, which was due Tuesday. Weatherford said it now plans to file that financial statement, a 10-K, by March 15. In the disclosure, the company said its first-quarter results are likely to be affected by political turmoil in the Middle East and Africa. Weatherford's operations have been disrupted in Tunisia, Yemen, Egypt, Libya and Bahrain, which are seeing varying levels of unrest. Those five countries account for 3% of Weatherford's revenue. The company's Libya assets total $141 million, and Duroc-Danner said the company has evacuated all of its non-Libyan employees and tried to secure as much of its equipment as possible. Beyond Libya, Duroc-Danner said strife in Yemen gives him the "most concern." Meanwhile he said that he sees little risk of regime change in Saudi Arabia or Algeria, where Weatherford also operates. Simmons & Co. analyst Bill Herbert said in a note to clients that the disrupted operations could reduce Weatherford's first-quarter earnings by more than $45 million, trimming earnings now estimated to be 26 cents a share by about 4 cents. -By Ryan Dezember and Matt Jarzemsky, Dow Jones Newswires; 713-560-6670; ryan.dezember@dowjones.com

Stock News for Seabridge Gold (SA)
DateTimeHeadline
03/04/201115:28:23CORRECT (3/2): Weatherford Shares Fall As Tax Accounting Errors...

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