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.

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