Lifted by a rebound in North American oilfield services, Weatherford International Ltd. on Tuesday said its third quarter earnings were up 87% from the year-ago period.

The company, which is headquartered in Switzerland, relies on North America for about half of its income. Net profit in the latest quarter jumped to $144.8 million (19 cents/share), compared with $77.4 million (11 cents) a year earlier. Total revenue rose 18% to $2.53 billion.

It was in North America that Weatherford's prowess shined. Revenue in the latest quarter soared 77% to $1.1 billion from 3Q2009, lifted by a stronger than expected onshore business and a seasonal recovery in Canada that offset impacts related to the Gulf of Mexico drilling moratorium. Operating income was $202 million, versus $33 million a year ago, and it was up $72 million, or 56%, higher sequentially. The current quarter's margins improved 430 basis points to 18.3%.

"Both the U.S. and Canada were very strong, driven by oil and shales," CEO Bernard J. Duroc-Danner said during a conference call. "Oil unconventionals represent 80% of our North American business. This is by legacy and by design."

Going forward, land activity is "likely to flatten out" in the United States, he said. "We don't expect the market to provide significant volume gains in '11, but we don't expect any weakness, either, overall. There is likely to be substitution of conventional gas segments and further strengths in oil and shales, particularly the gas and condensate plays. Some product lines will do better than others.

"Progression or decline will not be linear across all product lines." North American business is expected to strengthen particularly in Weatherford's Artificial Lift, Stimulation, Directional and Completion segment. "Pricing trends will be selectively constructive. This makes for good markets where share positioning and operating efficiency will yield a better probability of returns than market forces alone."

In North America, "we are positioned just right for changing market trends," he said. "I will remind the audience that our largest product line in North America is Artificial Lift," which represents a quarter of the company's North American revenues.

"On the other side of the coin," said Duroc-Danner, "our entire stimulation product line and a large segment of directionals and completions are positioned essentially on shales. We believe that even though the offshore ban is lifted, we will see subdued offshore drilling activity in the U.S. through the near term. Canada has a distinct outlook insofar as the oils, heavy oil, that is. The segment is a far greater percentage of the overall market at this point, and heavy oil activity has been suppressed over the past few years."

Weatherford also expects to see some "catch-up activity" in Canada, said the CEO. "We anticipate Canada as a whole to be particularly well behaved. The volumes will strengthen into '11 and even more so in '12. Canadian shale plays will be very important, but not until 2012. There's infrastructure buildup that is needed to turn the Canadian market into essentially an oil play...until then."

CFO Andy Becnel told analysts that Weatherford's revenue and operating income will continue to be "fairly split" between North America and the international operations. "That was our expectation going from 2Q2010 to 3Q2010, but what we ended up with was an outweighted performance in North America and a weaker international performance than we had anticipated...

"As you look forward into '11 from '10, and realizing, in essence, how strong North America was right now, that obviously has an 'up' impact on North America's prognosis. We don't expect any particular weakness.

"Yes, we may see the rig count down, but in terms of the spending intensity, we could see that fully picked up and make up for a lower rig count, possibly, in North America next year, with good incrementals, again, on absorption and pricing gains. We seem to be doing very well on that, on the back of the cost structure adjustments we made over the last 18 months."

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