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Weatherford International Ltd. (WFT)

  • Thu, Apr. 23, 2:29 PM
    • Weatherford International (WFT +7.2%) springs higher despite reporting Q1 earnings and revenues that came in below expectations, as it expects Q2 to represent the worst of its “miserable” North American results as customers cut spending to make it through the oil downturn.
    • CFO Krishna Shivram said in WFT's earnings conference that the North American unit, which had a Q1 operating loss of $10M, should end the year with an operating profit of as much as high single digits.
    • CEO Bernard Duroc-Danner said the U.S. business was spread thin with too many locations, creating "many layers" of costs, thus the company will raise its planned job cuts from an earlier estimate of 8K to 10K, ~18% of its workforce, with most of its layoffs coming from North America.
    • WFT says it expects to save $640M/year from its cuts, and it plans to shut down or consolidate 60 facilities this year.
    • WFT will cut its 2015 capital budget to $850M from $900M, it also said in the earnings report.
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  • Wed, Apr. 22, 11:52 PM
    • Weatherford (NYSE:WFT): Q1 EPS of -$0.04 misses by $0.05.
    • Revenue of $2.79B (-22.5% Y/Y) misses by $210M.
    • Shares -0.6% AH.
    • Press Release
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  • Tue, Apr. 21, 5:35 PM
  • Fri, Apr. 10, 3:17 PM
    • Weatherford International (WFT -0.3%) reportedly said at a conference yesterday that it will cut 8K workers in H1 of this year, in addition to last year's 6K layoffs from 2014, marking a 25% workforce reduction from the beginning of 2014.
    • WFT is upgraded to Outperform from Sector Perform with a $19 price target, up from $14, at RBC Capital, which cites the potential for incremental revenue opportunities resulting from the Halliburton-Baker Hughes merger, exposure to North American land drilling, and improving operational performance.
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  • Tue, Feb. 24, 10:59 AM
    • Transocean (RIG -1.6%) is poised to be the first in a wave of energy-related debt issuers downgraded to junk status, according to a Barclays report that says RIG could be stripped of its investment-grade ratings soon after it reports earnings tomorrow.
    • The cost of credit swaps used to protect RIG debt against default within five years has soared to 714 bps, a level associated with junk-rated companies, from less than 200 in September, Bloomberg says.
    • Weatherford (NYSE:WFT), Nabors Industries (NYSE:NBR) and Canadian Oil Sands (OTCQX:COSWF) are among the other investment-grade energy companies at risk of a downgrade to junk by mid-2016, according to Barclays.
    • As much as $20B of energy-related debt may be cut to junk within 18 months, expanding what is already the largest part of the high-yield, high-risk market by 11%, the report says.
  • Thu, Feb. 5, 1:52 AM
    • Along with its Q4 results, Weatherford International (NYSE:WFT) says it will slash 5,000 jobs by the end of the first quarter in attempt to lower costs amid sinking oil prices and budget cuts.
    • The headcount reduction follows job cuts at several other oil-field service companies, including Schlumberger, Halliburton and Baker Hughes, which all announced lay offs in the thousands in recent months.
    • WFT's Q4 net income came in at $252M compared to $53M, a year earlier.
  • Wed, Feb. 4, 11:02 PM
    • Weatherford (NYSE:WFT): Q4 EPS of $0.32 beats by $0.01.
    • Revenue of $3.73B (-0.3% Y/Y) misses by $160M.
    • Press Release
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  • Wed, Jan. 28, 7:57 AM
    • Weatherford International (NYSE:WFT) discloses that it is eliminating the COO position, with Dharmesh Mehta moving a role as executive VP for corporate strategy.
    • The COO position will not be filled as the company adopts a flatter management structure, in an effort to cope with the new global oil environment.
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  • Fri, Jan. 9, 7:55 AM
    • Oil and gas companies could cut E&P spending in North America by 30% or more this year if U.S. crude oil prices continue to trade at $50-$60/bbl, Barclays estimates on the basis of a survey of 225 oil and gas companies.
    • The firm expects U.S. onshore rig count to fall by 500 rigs over the year to ~1,250 rigs by the end of 2015.
    • Barclays says this is only the seventh time in the 30-year history of its survey that global spending is estimated to fall, adding that spending rose by more than 10% the following year after almost every decline.
    • In the oilfield services group (NYSEARCA:OIH), the firm initiates Halliburton (NYSE:HAL), Baker Hughes (NYSE:BHI), National Oilwell Varco (NYSE:NOV) and FMC Tech (NYSE:FTI) at Overweight, and Forum Energy Tech (NYSE:FET) and Dril-Quip (NYSE:DRQ) at Underweight; Schlumberger (NYSE:SLB), Cameron (NYSE:CAM), Weatherford (NYSE:WFT) and Superior Energy (NYSE:SPN) are started at Equal Weight.
  • Wed, Jan. 7, 2:55 PM
    • Credit Suisse's James Wicklund suggests avoiding oilfield services stocks, as the firm cuts its earnings estimates on Schlumberger (SLB -0.7%), Weatherford (WFT -0.7%) and Cameron International (CAM +0.9%) by 20% or more.
    • The analyst expects the rig count to decline every week for the next three months and fall by another 400-plus rigs; it also believes downside earnings revisions have just started, and the conference calls will be ugly, meaning sector sentiment is bound to get worse.
    • "While prices typically bottom in Q1, the duration and magnitude of the slowdown required to balance the markets will require at least a full year, so prices could skip along that bottom for an extended period," Wicklund writes.
  • Tue, Jan. 6, 12:32 PM
    • Oppenheimer’s James Schumm thinks investors should buy high-quality oil services stocks such as Baker Hughes (NYSE:BHI), Halliburton (NYSE:HAL), Schlumberger (NYSE:SLB) and Weatherford (NYSE:WFT).
    • Large-cap oil service stocks "should not be this volatile," Schumm writes, noting that the world consumes ~92M bbl/day of oil, and demand is still growing - albeit at a slower rate - and is relatively inelastic, which requires a high level of service investment every year; low investment levels in 2015 will have to be made up in 2016 or 2017, barring a global economic shock.
    • Earlier: "Peak pessimism" at hand for oil services stocks, Citi says.
  • Dec. 10, 2014, 12:58 PM
    • Energy stocks are slammed across the board as oil prices take another nosedive (I, II), with the losses heaviest on shares of small, U.S.-based oil and gas producers.
    • “Financial leverage is being thrown out the window, and everything else is being purged as well,” says Simmons analyst Bill Herbert, who adds that cuts to production budgets in the coming year likely will mean more pain for oil service companies.
    • Among the hardest-hit shares: TPLM -15.2%, CRK -12.4%, GDP -11.9%, NOG -9.5%, AREX -8.6%.
    • Investors have been less quick to dump shares of integrated oil companies, but today they have been smacked too: XOM -2.8%, CVX -2.9%, COP -2.3%, BP -2%, RDS.A -2.2%, TOT -2.3%.
    • Today's worst performers on the S&P 500 include OKE -8.2%, DNR -7.4%, NE -5.6%.
    • Service companies also are down: SLB -2.6%, HAL -2.7%, WFT -6.6%, BHI -2%.
  • Dec. 9, 2014, 6:42 PM
    • Oilfield contractors hired to drill wells and fracture rock will have to lower prices by as much as 20%, analysts say, which could cut more than $3B from the 2015 earnings that had been expected for the likes of Schlumberger (NYSE:SLB), Halliburton (NYSE:HAL), Baker Hughes (NYSE:BHI) and Weatherford International (NYSE:WFT).
    • Oil producers will be pushing for discounts wherever they can find them, and may begin to take shape as early as this month, with fracking services perhaps seeing the biggest chunk of pricing discounts because it is the largest part of the cost of drilling a new well.
    • Earnings estimates for oil service companies that have been cut since last week will continue to be revised lower, says Credit Suisse's James Wicklund: “We’ve just gotten started.”
  • Dec. 3, 2014, 3:59 PM
    • Oppenheimer initiates coverage on Schlumberger (SLB +1.6%), Halliburton (HAL +1.4%) and Weatherford (WFT +1%) with Outperform ratings and rates oilfield services rival Baker Hughes (BHI +1.6%) at Perform.
    • The firm views the drop in oil prices as an opportunity, believing investors should take advantage of recent stock price weakness and build or add to positions in SLB, HAL and WFT; on SLB, Oppenheimer says the stock tends to outperform peers in down markets, and SLB is clearly well positioned to benefit from an increase in E&P spending should oil prices rebound.
    • The market is taking a myopic view on HAL's combination with BHI, the firm says, as the proposed merger will create a more valuable entity that can more effectively compete with SLB internationally.
  • Dec. 2, 2014, 10:33 AM
    • BofA Merrill Lynch downgrades the energy sector to Marketweight following OPEC’s decision to maintain rather than cut production, now seeing $70-$75 as Brent crude's 2015 range, while warning of value traps.
    • "With the collapse in crude, the sector now trades at a 20% discount to the S&P 500, where it has historically traded in-line with the market," the firm says, "but further estimate cuts are likely to come, [as] prices are falling faster than earnings are deteriorating."
    • Seeing WTI possibly falling as low as $50 in the coming month, BofA warns that "volatility in oil prices translates to volatility in earnings."
    • For exposure to the sector, the firm prefers big, lower beta stocks such as Exxon Mobil (XOM +0.5%).
    • Citi also cautions against assuming that oil prices have found a bottom, and wants to see a more thorough confirmation of a technical base of support before proclaiming anything more than the latest trading bottom; however, Citi's Scott Gruber recommends moving aggressively on oil services if WTI crude falls into the $50s - his top picks, in order, are Baker Hughes (BHI +0.1%), Halliburton (HAL -1.3%) and Weatherford (WFT +2.7%).
  • Dec. 1, 2014, 7:46 AM
    • Weatherford International (NYSE:WFT) agrees to sell its engineered chemistry and Integrity drilling fluids business to Berkshire Hathaway (BRK.A, BRK.B) unit Lubrizol Corp. for $750M in cash plus a potential increase of $75M for an earnout tied to the post-closing performance of the businesses.
    • WFT says the sale is another step in its plan to divest non-core businesses and will bring total 2014 cash divestiture proceeds to ~$1.8B, implying a net debt of $6.6B-$6.8B at year end.
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Company Description
Weatherford International Ltd provides equipment and services to the oil and natural gas exploration and production industry, both on land and offshore, through its two product service line groups.