Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Weatherford Finds Its Passing Gear

Unlike Schlumberger (NYSE: SLB  ) and BJ Services (NYSE: BJS  ) , both of which recently disappointed investors with less-than-stellar earnings reports, Weatherford International (NYSE: WFT  ) posted impressive results for the December-ended period. In fact, the company produced solid gains in most of its geographic areas.

For the quarter, Weatherford earned $344.8 million, or $0.99 a share, excluding investigation and exit costs involved with its departure from sanctioned countries. Those figures compare to $266.7 million or $0.76 a share in the comparable year-ago quarter. For those Fools keeping score, that's a nearly 29% jump in earnings. Revenues for the quarter were up 21%.

Weatherford offers an array of high-tech drilling equipment and services. It managed to expand its North American revenues by 10% in the quarter, although its operating income on its home continent was down 7%. Nevertheless, the revenue growth occurred in the face of a slight dip in the U.S.-Canadian rig count.

At the same time, the company's operating income in Latin America increased by 37%, and the region that includes Europe and West Africa contributed 92% more operating income. In the Middle East, North Africa, and Asia, Weatherford's operating income was up 35% from a year ago.

So here's my dilemma on Weatherford: I believe that the company is unusually sound and well-managed. But it's also the proud owner of a share price that's nearly 70% higher than it was this time last year. As such, urging my Foolish friends to initiate or add to positions immediately would necessarily involve instigating a chase.

I'm more inclined to suggest acquiring Weatherford on a pullback rather than at current levels. In the meantime, Halliburton (NYSE: HAL  ) , Baker Hughes (NYSE: BHI  ) , and Diamond Offshore (NYSE: DO  )  are attractive places for energy services investments. All three trade at relative valuation discounts to Weatherford, outdo the latter company's return on equity metrics, and pay dividends.

For related Foolishness:

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 563801, ~/Articles/ArticleHandler.aspx, 10/27/2016 5:14:58 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 7 hours ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/26/2016 4:03 PM
WFT $5.74 Down -0.42 -6.82%
Weatherford Intern… CAPS Rating: ****
BHI $54.76 Up +0.37 +0.68%
Baker Hughes CAPS Rating: ****
BJS.DL $23.18 Down +0.00 +0.00%
BJ Services Compan… CAPS Rating: ****
DO $17.40 Up +0.42 +2.47%
Diamond Offshore D… CAPS Rating: **
HAL $47.62 Down -0.15 -0.31%
Halliburton CAPS Rating: ****
SLB $80.02 Down -0.20 -0.25%
Schlumberger CAPS Rating: ****