UPDATE 1-Weatherford scales back in Mexico amid uncertainty

* Not turning back on Mexico; feels has learned lessons

* Q3 EPS ex-items 18 cents vs 17 cents expected

* Revenue up 18 pct at $2.53 bln

* Shares down 6 pct on uncertain outlook, crude price drop

SAN FRANCISCO, Oct 19 (BestGrowthStock) – Oilfield services company
Weatherford (WFT.N: ) reported slightly better-than-expected
quarterly earnings and unveiled plans to scale back its Mexican
operations as the country curtails some big oil developments.

Weatherford International Ltd also gave strong 2011
earnings guidance of $1.30 per share, but its shares tumbled as
crude oil prices fell and investors wondered how certain the
company could be of hitting that bullish target next year.

Weatherford is anticipating revenue growth of about 20
percent in Russia to help drive its performance, while Chief
Executive Bernard Duroc-Danner said things can only get better
in Mexico given how much activity has slowed down there.

“Mexico is not a market at all that we are turning our back
on. Quite the contrary, but we are scaling it down very
substantially,” he told analysts on a call. “And we understand
the volatility of the market also, and will not forget.”

Mexican state oil monopoly Pemex [PEMX.UL] has sharply
reduced drilling in recent months as it is not renewing
drilling contracts at its Chicontepec project while it
reassesses the much-criticized multibillion-dollar venture.

The number of rigs operating in Mexico was 112 in August,
according to the energy ministry, down from a peak of 183 in
September 2009. Most of that drop was in Pemex’s north region,
home to Chicontepec and the Burgos natural gas project.

Weatherford said it is now down to just three drilling
operations in Mexico, versus 50 in late 2009, and expects to
average less than a third of that peak level in the future.

Larger rival Halliburton Co (HAL.N: ) had said on Monday it
was still deciding whether to participate any more in the
Chicontepec project given all the uncertainty.

Weatherford’s third-quarter earnings, which were released
late on Monday and included a $54 million Mexico-related
charge, were lifted by onshore North American activity, even as
it focuses more on other parts of the world.

Net income rose to $145 million, or 19 cents a share, from
$77 million, or 11 cents a share, a year ago. Excluding items,
its profit was 18 cents a share, whereas analysts, on average,
had expected 17 cents, according to Thomson Reuters I/B/E/S.

Revenue rose 18 percent to $2.53 billion.

Weatherford, a company with Texas roots now based in
Switzerland, had earlier said it would list its shares on the
Swiss stock exchange later this year. [ID:nLDE69I0FN]

The New York Stock Exchange-listed shares fell 6 percent to
$17.31, having gained 18 percent in the prior two months.

On Monday, Halliburton posted slightly better-than-expected
earnings, but its shares dropped as investors had been quietly
anticipating another blockbuster quarter. [ID:nN18244280]

Sector leader Schlumberger Ltd (SLB.N: ) reports on Friday.
(Reporting by Braden Reddall in San Francisco, with additional
reporting by Robert Campbell in Mexico City, editing by Dave

UPDATE 1-Weatherford scales back in Mexico amid uncertainty