Why Weatherford International's Shares Got Crushed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of drilling service company Weatherford International (NYSE: WFT  ) fell 15% today after reporting earnings.

So what: Third-quarter revenue grew 13% to $3.82 billion and pre-tax net income of $191 million, from $270 million a year ago. Analysts had estimated the company would report $3.9 billion in revenue.

Now what: Management said that they would focus on more profitable growth opportunities and was looking to sell $1 billion in assets. Tax controls also continue to be a problem and the company hopes to complete tax remediation by the end of the month. There are just too many risks here for me to be a buyer, especially when a company has trouble reporting accurate information to investors.

Interested in more info on Weatherford International? Add it to your watchlist by clicking here.


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  • Report this Comment On November 13, 2012, at 9:52 PM, hanover67 wrote:

    WFT is a "bad" ompany from a stockholder's standpoint. Quarter after quarter they report negative "surprises" about their continuing accounting problems, and their increases in revenues are offset by non-recurring hits to their earnings - they don't even report earnings per share because they can't figure out what their taxes are.

    Management does not have its eye on the ball, and is in danger of losing market share to others who are capitalizing on growth in the oilfield services industry. I'm a stockholder, down 39% so far, but I wish I wasn't.

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