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Weatherford (WFT) Q2 Earnings Beat Estimates, Revenues Miss

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Weatherford International Ltd. WFT, reported second-quarter 2018 adjusted loss of 16 cents per share, narrower than the Zacks Consensus Estimate of a loss of 18 cents and a loss of 28 cents in the prior-year quarter.
 

Weatherford International PLC Price, Consensus and EPS Surprise

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

Total revenues amounted to $1,448.0 million, up from $1,363.0 million in the year-ago quarter. However, the figure lagged the Zacks Consensus Estimate of $1,472.0 million.

The quarterly results were affected by low number of offshore projects in West Africa and Asia, which was partially offset by higher activity in Mexico, Colombo and Argentina along with increase in U.S. rig counts and favorable product mix.

Operational Performance

The leading oilfield services company realigned organization into two operating segments — Western Hemisphere and Eastern Hemisphere — during the fourth quarter of 2017. The Western Hemisphere segment includes the previous North America and Latin America businesses as well as land drilling rig operations in Colombia and Mexico.

The Eastern Hemisphere segment comprises 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 second quarter, revenues from Western Hemisphere were $769 million, up 1.7% sequentially and 13.4%year over year. Revenues beat the Zacks Consensus Estimate of $764 million. Higher activity in Mexico, Colombo and Argentina along with increase in U.S. rig counts and favorable product mix attributed to improvement. This was partially offset by spring breakup in Canada.

Revenues in Eastern Hemisphere were $679 million, up 1.8% sequentially but down 0.9% year over year. Revenues also lagged the Zacks Consensus Estimate of $705 million. The sequential rise was propelled by higher activity in the North Sea, Saudi Arabia and Asia, which was partially offset by lower production deliveries in Kuwait. The year-over-year fall can be attributed to low number of offshore projects in West Africa and Asia, offset by higher completions and well construction activity in Saudi Arabia

Liquidity

As of Jun 30, Weatherford had $415 million in cash and cash equivalents. Long-term debt amounted $7,634 million. The company spent approximately $48 million in capital expenditures during the reported quarter.

Q2 Price Performance  

During the second quarter, Weatherford’s shares gained 43.6% compared with the industry’s 18.4% rise.

Zacks Rank & Stocks to Consider

Currently, Weatherford carries a Zacks Rank #3 (Hold).

A few better-ranked players in the same sector are ConocoPhillips COP and China Petroleum and Chemical Corporation SNP, also known as Sinopec, and CVR Refining, LP CVRR. All these stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

ConocoPhillips, based in Houston, TX, is a major global exploration and production (E&P) company. It pulled off an average positive earnings surprise of 27.6% in the last four quarters.

Sinopec is one of the largest petroleum and petrochemical companies in Asia. The company delivered an average positive earnings surprise of 492.8% in the trailing four quarters.

Sugar Land, TX-based CVR Refining is an independent downstream energy partnership with refining and associated logistics properties in the Midcontinent United States. The company delivered an average positive earnings surprise of 52.8% in the last four quarters.

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