This article was originally published by Seeking Alpha
By Sarfaraz A. Khan, Research Assistant: Gohar Yousuf
February 27, 2014
This year, the shares of the Switzerland-based mid-cap oil and
gas services company, Weatherford
International Ltd (WFT) have remained under pressure. The company has recently
given a disappointing guidance,
which came in well below analysts' estimates, for
its quarterly results due next week. However, the company has been trying to
improve its financial health as it increases its focus on its core business.
Disappointing Guidance
Weatherford has witnessed
considerable growth on the back of the US. oil and gas boom. The company,
however, started to struggle due to its sluggish growth in the international
markets and several one-time charges related to accounting and legal issues
that have shaken the confidence of investors.
For its fourth quarter,
Weatherford announced that it is expecting earnings of $0.08 per share, which
is significantly below analysts' estimate of $0.26 per share. This means that
the company's earnings estimates are roughly $200 million lower than Wall
Street's EBITDA estimates.
Due to the massive size of the
difference in earnings expectations, the investors were clearly surprised. This
lower than estimated earnings forecast is largely credited to the reduction in
activity in Latin America, disruptions in Middle East and the severe weather
conditions in North America and the North Sea.
Recurring
"One-time" charges
Back in 2011, material
inaccuracies were found in Weatherford's tax calculation. Although Weatherford
took corrective measures, more errors and other bookkeeping mistakes were
revealed again, just a … read full article at Seeking Alpha.
