Thursday, February 27, 2014

This Beaten-Down Mid-Cap Oilfield Services Firm Looks Interesting

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.