We maintain our Neutral recommendation on Weatherford International (WFT) shares. Strong performance in North America and Europe/West Africa/CIS segments offset the Latin American weakness. We prefer the stock for its growing international prospects, particularly in Russia and Iraq. Though the drilling moratorium has minimal impact on the company’s bottom line, we are concerned about the weakness in Latin America and near-term growth pace in international margins.
Switzerland-based Weatherford is a leading oilfield services company. It manufactures and provides equipment and services used in drilling, completion and production of oil and natural gas wells. The company operates through four segments, namely North America, Latin America, Europe/West Africa/CIS and Middle East/North Africa/Asia.
Other than its large-cap peers, Weatherford is the only oil services company with enough product lines to offer integrated product management. In Latin America and the Middle East, the company offers drilling services along with the other typical product lines for well drilling.
We have a bullish stance on the stock due to its international prospects. We believe that the company will generate significantly higher revenues and earnings from international operations over the next few years in comparison to its peers.
Management guided third quarter earnings of 16 cents per share as North American land performance will mostly offset slower Gulf activity. However, the company’s debt-heavy balance sheet and weak free cash flow generation capability are our current concerns.
Switzerland-based Weatherford is a leading oilfield services company. It manufactures and provides equipment and services used in drilling, completion and production of oil and natural gas wells. The company operates through four segments, namely North America, Latin America, Europe/West Africa/CIS and Middle East/North Africa/Asia.
Other than its large-cap peers, Weatherford is the only oil services company with enough product lines to offer integrated product management. In Latin America and the Middle East, the company offers drilling services along with the other typical product lines for well drilling.
We have a bullish stance on the stock due to its international prospects. We believe that the company will generate significantly higher revenues and earnings from international operations over the next few years in comparison to its peers.
Management guided third quarter earnings of 16 cents per share as North American land performance will mostly offset slower Gulf activity. However, the company’s debt-heavy balance sheet and weak free cash flow generation capability are our current concerns.
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