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Weatherford (WFT) Posts Wider-than-Expected Loss in Q1

Zacks Equity Research

Leading oilfield services’ company Weatherford International Ltd. WFT reported first-quarter 2017 adjusted loss of 32 cents per share, wider than the Zacks Consensus Estimate of a loss of 31 cents as well as the year-earlier adjusted loss of 29 cents per share. The loss was mainly attributable to adverse impact of pressure pumping operations as well as lower product sales.

First-quarter total revenue decreased to $1,386.0 million from $1,585.0 million in the year-ago period. The reported figure, however, beat the Zacks Consensus Estimate of $1,370.0 million.

Operational Performance

North American revenues for the first quarter were $490 million, down 9.8% from the year-ago comparable quarter. The shutdown of U.S. pressure pumping operations adversely impacted revenues. Operating loss of $18 million was substantially narrower than an operating loss of $128 million in the prior-year quarter.

Middle East/North Africa/Asia posted revenues of $321 million, down 11.1% or $40 million from the year-earlier quarter. First-quarter operating loss of $3 million compared unfavorably with operating income of $6 million in the prior-year quarter. The decline in revenues is attributable to lower product sales across the region as well as continued pricing pressure and lower product sales.

Europe/West Africa/FSU posted revenues of $244 million, down 5.1% or $13 million from the year-earlier quarter. The decrease was mainly due to the normal first-quarter seasonality in the Norwegian Continental Shelf and parts of Russia. Operating loss in the reported quarter was $10 million, substantially wider than an operating loss of $1 million in the prior-year quarter.

Latin American revenues of $242 million were down $63 million or 20.6% year over year. First-quarter operating income was $9 million compared with $44 million in the year-ago period. Revenues declined primarily due to lower activity as well as project delays in Argentina as a result of a change in the compensation structure for union-based employees.

Weatherford International PLC Price, Consensus and EPS Surprise

 

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

Liquidity

As of Mar 31, 2017, Weatherford had $546 million in cash and cash equivalents. It had long-term debt of $7,299 million. Weatherford spent approximately $40 million in capital expenditures during the reported quarter.

Zacks Rank

Weatherford currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the same space are Diamond Offshore Drilling Inc. DO, China Petroleum & Chemical Corporation SNP and Bellatrix Exploration Ltd. BXE. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Diamond Offshore Drilling posted a positive earnings surprise of 341.67% in the preceding quarter. It beat estimates in all of the four trailing quarters with an average positive earnings surprise of 353.28%.

Bellatrix Exploration posted a positive earnings surprise of 240.00% in the preceding quarter. It beat estimates in three of the four trailing quarters with an average positive earnings surprise of 58.54%.

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