Weatherford (WFT) Misses on Earnings and Revenues in Q4

Weatherford International plc WFT posted fourth-quarter 2017 adjusted loss of 33 cents per share, wider than the Zacks Consensus Estimate of a loss of 21 cents and year-ago quarter’s loss of 32 cents. The change in accounting and lower activity in Venezuela led to the decline.

In 2017, Weatherford  reported adjusted loss of $1.16 per share compared with adjusted loss of $1.29 a year ago. However, the figure was wider than the Zacks Consensus Estimate of a loss of $1.02.

Total revenues of $1,490.0 million missed the Zacks Consensus Estimate of $1,495.0 million. However, revenues increased significantly from $1,406.0 million in the year-ago quarter.
 

Weatherford International PLC Price, Consensus and EPS Surprise

 

Weatherford International PLC Price, Consensus and EPS Surprise | Weatherford International PLC Quote

In 2017, total revenues declined 0.9% year over year to $5,699 million and lagged the Zacks Consensus Estimate of $5,720 million.

Operational Performance

The leading oilfield services company realigned its organization into two operating segments — Western Hemisphere and Eastern Hemisphere — during the fourth quarter. The Western Hemisphere segment will include the previous North America and Latin America segments as well as land drilling rig operations in Colombia and Mexico.

The Eastern Hemisphere segment will comprise the previous Middle East/North Africa/Asia Pacific segment and Europe/SSA/Russia segment as well as land drilling rig operations in the Eastern Hemisphere. Research and development expenses will be incorporated in the Western and Eastern Hemisphere segment results.

In the fourth quarter, revenues from Western Hemisphere were $759 million, down 1% sequentially but up 3% year over year. Project delays in Argentina and a change in accounting for revenues for customers in Venezuela affected quarterly results. This was partially offset by higher activity in Mexico and seasonal recovery in Canada. The year-over-year increase can be attributed to improvement of activity in Canada, the United States and Mexico, offset by a decline in Venezuela.

Revenues in Eastern Hemisphere were $731 million, up 5% and 9% sequentially and year over year, respectively. The sequential increase was owing to higher sales in Kuwait, Saudi Arabia and Russia. The year-over-year rise was led by higher activity in Kuwait and Russia, offset by overall decline in Australia, Oman and Pakistan.

Liquidity

As of Dec 31, 2017, Weatherford had $613 million in cash and cash equivalents. The company’s long-term debt was $7,541 million. Weatherford spent approximately $78 million in capital expenditures during the reported quarter.

Q4 Price Performance

In the last three months, Weatherford shares underperformed the industry. During the aforesaid period, the company’s shares lost 8.9% compared with a 1.8% decline for the broader industry.

 

Zacks Rank & Key Picks

Weatherford carries a Zacks Rank #4 (Sell).

A few better-ranked players in the same sector includes EOG Resources (EOG), Pioneer Natural Resources Company (PXD) and Devon Energy (DVN). All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Houston, TX-based EOG Resources is a major independent oil and gas exploration and production company. The company delivered an average positive earnings surprise of 40.94% over the preceding four quarters.

Headquartered at Irving, TX, Pioneer Natural Resources Company is an independent oil and gas exploration and production company. It delivered an average positive earnings surprise of 67.62% over the preceding four quarters.

Devon Energy Corporation, based in Oklahoma City, is an independent energy company engaged primarily in the exploration, development and production of oil and natural gas. The company delivered a positive earnings surprise of 13.77% in the preceding quarter.

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Weatherford International PLC (WFT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research