Shares of Weatherford International (NYSE:WFT) were in rally mode on Friday, rocketing nearly 25% by 2:45 p.m. EST. Driving the oilfield service company's stock surge was its fourth-quarter results.
On the one hand, Weatherford International reported another disappointing quarter. The company posted an adjusted loss of $140 million, or $0.14 per share, which missed analysts' expectations by $0.02 per share. That pushed the oilfield service company's full-year loss to $587 million, marking the fourth straight year that it lost money.
However, despite that operating loss, Weatherford International did generate $105 million in net cash from operating activities. Further, it produced $65 million in free cash flow. That number pleased analysts, with Evercore ISI commenting that the company was "able to continue to execute its transformation initiatives despite a volatile commodity price environment in the fourth quarter and post positive free cash flow."
Weatherford International is trying to turn around its struggling business by working to get out from under the weight of a large debt load that crippled its flexibility after crude prices crashed a few years ago. While the company's ability to generate free cash flow during the fourth quarter -- which was a challenging one as oil prices plummeted again -- is a positive development, Weatherford still has a long way to go. Because of that, investors should steer clear of this troubled oilfield service company until its finances are back on solid ground.