Leading oilfield services' company
Weatherford International Ltd.
) fourth quarter 2012 adjusted earnings of 1 cent per share came
in way below the Zacks Consensus Estimate of 18 cents. The
results also dropped substantially from the year-earlier adjusted
earnings of 13 cents. The earnings declined mainly due to the
weakness in North American earnings.
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For full-year 2012, the company's profit of 58 cents per share
lagged the Zacks Consensus Estimate of 68 cents. However, the
reported figure was above the year-earlier earnings of 45 cents
Total revenue, in the fourth quarter, increased more than 9% year
over year to $4,058.0 million, and surpassed the Zacks Consensus
Estimate of $3,903 million. Full-year 2012 total revenue
increased more than 17% year over year to $15,215 million.
revenues decreased 1.1% year over year to $1,682.0 million. The
continued decline in the US land rig count as well as oversupply
of hydraulic fracturing capacity contributed to the loss. The
Stimulation and Chemicals segment was also weak, with operating
income of $226.0 million compared with $381.0 million in the
Middle East/North Africa/Asia
revenues climbed 26.1% year over year to $851 million. The
increase was mainly broad-based and additional activity in Saudi
Arabia, Kuwait and Oman contributed to the growth. The segment's
operating income jumped 70.6% year over year to $58 million.
posted revenues of $669.0 million, up 9.9% year over year. The
segment's operating income dropped 26.3% year over year to $59.0
million. Strong performance in Russia, Romania and Norway aided
the revenue growth.
revenues climbed 17.9% year over year to $856.0 million, buoyed
by Russia, Romania and Norway. Operating income from this segment
expanded significantly to $125.0 million from the year-ago level
of $114.0 million.
As of Dec 31, 2012, Weatherford had $300 million in cash and cash
equivalents and long-term debt was $7,049 million. Weatherford
spent approximately $2.25 billion in capital expenditures during
With respect to 2013, the company maintained a neutral outlook
for its North American business and expects moderate growth in
revenue and operating income.
Weatherford foresees sustained growth and expanding margins in
its Latin America region, supported by improvements in Argentina
The company also expects improvements in the Eastern Hemisphere
in 2013, with upside in Europe, Sub-Saharan Africa and Russia, as
well as stronger activity levels in the Middle East, North Africa
and Asia Pacific.
The annual effective tax rate in 2013 is expected to be about
We remain optimistic on Weatherford's operational and financial
leverage to international growth in 2013. But the company's
debt-heavy balance sheet, weak free cash flow as well as
competition from larger peers such as
) are causes of concern.
Weatherford holds a Zacks Rank #3 (Hold). However, there are
other stocks in the oil and gas sector -
NGL Energy Partners LP
Laclede Group Inc
) - which hold a Zacks Rank #1 (Strong Buy) and are expected to