Can Weatherford Storm Back and Beat Estimates?

The past 12 months have been quite turbulent for oil-field service and equipment provider Weatherford International (NYSE: WFT  ) . The company's stock cratered last November when it announced dismal numbers and updated the market on its accounting issues. However, the stock has since bounced back as the company is starting to put its past behind it.

Managing expectations
Investors and analysts aren't expecting much this quarter. The company is expected to report earnings of just $0.15 per share for the quarter. That's nearly 12% less than the $0.17 it earned in the same quarter of last year. The other key number to pay attention to is revenue -- analysts are looking for $3.86 billion, which is just a tick higher than the $3.84 billion it reported last quarter. The company will need to hit those numbers so that it doesn't disappoint the market.

While the market will be looking at those results, it's important for long-term investors to look past the headline numbers. One area to pay particular attention to is to see whether the company has put its previous missteps behind it. For example, last quarter the company spent $18 million on professional fees to fix its income tax issues, as well as $8 million on its legacy lump sum contracts in Iraq, and another $8 million in severance charges. Putting an end to these one-time charges will be critical to the company's future.

Outlook
Speaking of its future, Weatherford is looking for modest growth in the second half of this year in North America. In addition, it sees a steady improvement in Latin America, as well as positives in the rest of its international markets. Investors should pay attention to see if this outlook remains intact. I'd especially look at what Weatherford has to say about Latin America.

Operations in the region really hurt Baker Hughes (NYSE: BHI  ) results last quarter, so it will be key to see if there was any carryover to Weatherford. Baker Hughes said that sharp declines in Brazil and Mexico, in particular, hurt its business. This has dampened its outlook for the region which is why Baker Hughes is taking action to reduce its costs in order to improve profitability. Weatherford's Latin American business has been choppy of late, with profits last quarter up 15% year over year, but down 22% over the prior quarter so further choppiness wouldn't be surprising.

The other area for Weatherford investors to watch is North America. It's had to endure the same sluggishness as rivals Baker Hughes and Halliburton (NYSE: HAL  ) . However, last quarter, Weatherford's revenue in the region was up 4% year over year, so it will be important for it to show more growth in this quarter and beyond. If its peers are any indication, Weatherford should benefit along with the industry as North American oil-field services rebound. Halliburton, for example, sees the trend toward multi-well pads being a positive development for its business because it should result in higher service intensity. It's important that Weatherford sees similar gains, or else it could mean that its losing business to rivals.

Final Foolish thoughts
It hasn't been all smooth sailing for Weatherford of late. The company dug itself quite a hole and is only now starting to emerge. Only time will tell if that hole causes the company any long-term damage, especially with its reputation to its customers. That's why it's important to look past the headlines of the company's upcoming earnings release and look at what's really behind those numbers. 

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