(Adds details from conference call, updates share price)
By Anna Driver
HOUSTON, July 21 (Reuters) - Weatherford International Ltd (WFT.N), reported on Monday that second-quarter profit more than doubled on increased spending for oil and gas exploration, but still fell short of Wall Street expectations, sending shares down as much as 7.4 percent.
The oilfield services company said the profit miss was caused by higher-than-expected project costs in Mexico and weakness in the Canadian drilling market.
“Start-up costs in Latin America were greater than we expected, but North America was a nice surprise,” Capital One Southcoast analyst Pierre Conner wrote in a note to clients.
Weatherford, based in Houston, and other oilfield service companies have benefited in recent months as energy companies looking to profit from a surge in oil and gas prices have increased drilling.
The company’s chief executive, Bernard Duroc-Danner, told analysts on a conference call that 2009 should be a good year for the company, with 40 percent revenue growth in international markets and strength in the United States drilling market.
“No doubt, at this time, we expect a robust 2009 in the United States,” Duroc-Danner said.
Profit jumped to $371 million, or 53 cents per share, from $165.3 million, or 24 cents per share, a year earlier.
Excluding special items, earnings from continuing operations were 43 cents a share. On that basis, analysts, on average, looked for 45 cents, according to Reuters Estimates.
Revenue rose 23 percent to $2.23 billion, driven by a 7 percent increase in rig count. Wall Street expected $2.21 billion.
In North America, revenue was up 15 percent to $1.012 billion, and operating income of climbed 17 percent to $224 million, helped by improvement in the United States.
Revenue for its markets in the Middle East, North Africa and Asia soared 28 percent to $556 million on a jump in activity in countries including China, Libya and Algeria. Operating profit increased 35 percent to $131 million from a year ago.
Latin American revenue climbed 31 percent to $271 million. Operating income rose 28 percent from a year earlier to $58 million, but fell 4 percent from the first quarter on costs related to new projects in Mexico.
Weatherford shares were off 78 cents at $38.89 on the New York Stock Exchange, but fell as low as $37.69. The stock was underperforming the Philadelphia Stock Exchange index of oilfield services .OSX, which rose 1.6 percent. (Additional reporting by Euan Rocha; editing by Jeffrey Benkoe)