We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Weatherford Prices Upsized Underwritten Public Offering
Read MoreHide Full Article
Leading oilfield services company Weatherford International plc announced the pricing of an upsized underwritten public offering of $1.5 billion senior notes. The offering is split equally between notes carrying a coupon rate of 7.750% due 2021 and 8.250% due 2023. The offering is expected to close on Jun 17, 2016.
Weatherford International intends to use the proceeds from the offering to purchase its existing senior notes for cash. The notes that the company plans to purchase consist of 6.35% senior notes due 2017, 6.00% senior notes due 2018, 9.625% senior notes due 2019 and 5.125% senior notes due 2020. As of Mar 31, 2016, Weatherford had $464 million in cash and cash equivalents and long-term debt of $5,846 million.
How is Weatherford International Coping with Soft Business?
Going forward, Weatherford International could be more affected than its peers if the North American market continues to underperform. The reason is that a significant portion of its revenues is generated from this region. Though expenditure on exploration and production activity is increasing, it might be partially offset by competitive pricing and continued margin pressure from excess capacity. Additionally, Weatherford International believes that the depressed natural gas and oil price environment will put further downward pressure on its earnings.
In order to cope with changing market conditions, Weatherford International has been aligning its organizational structure and cutting costs. The company continued with its reduction in force in the recently reported first quarter of 2016 – completing 78% of its latest 6,000 headcount reduction target, terminating operations at four of the planned nine manufacturing and service facilities for the year, and shutting down 26 operating and other facilities in North America.
Weatherford International intends to reduce its 2016 costs by cutting another 2,000 jobs. The company also has plans to shut down 30 operating and other facilities by the end of this year, mostly by the end of the second quarter. Also, Weatherford International has reduced its full-year guidance for capital expenditures to $250 million. This is 63% and 83% lower than its spending levels in 2015 and 2014, respectively.
We believe, the measures undertaken by Weatherford International to reduce costs, both through direct cost reduction in view of the major downturn as well as by streamlining its overall cost structure, should result in a more efficient and better-run company going forward. With revenues projected to surpass its peers, this could lead to improved earnings performance by the end of 2016.
The company currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the same space are CVR Refining, LP , Braskem S.A. (BAK - Free Report) and North Atlantic Drilling Limited . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Weatherford Prices Upsized Underwritten Public Offering
Leading oilfield services company Weatherford International plc announced the pricing of an upsized underwritten public offering of $1.5 billion senior notes. The offering is split equally between notes carrying a coupon rate of 7.750% due 2021 and 8.250% due 2023. The offering is expected to close on Jun 17, 2016.
Weatherford International intends to use the proceeds from the offering to purchase its existing senior notes for cash. The notes that the company plans to purchase consist of 6.35% senior notes due 2017, 6.00% senior notes due 2018, 9.625% senior notes due 2019 and 5.125% senior notes due 2020. As of Mar 31, 2016, Weatherford had $464 million in cash and cash equivalents and long-term debt of $5,846 million.
How is Weatherford International Coping with Soft Business?
Going forward, Weatherford International could be more affected than its peers if the North American market continues to underperform. The reason is that a significant portion of its revenues is generated from this region. Though expenditure on exploration and production activity is increasing, it might be partially offset by competitive pricing and continued margin pressure from excess capacity. Additionally, Weatherford International believes that the depressed natural gas and oil price environment will put further downward pressure on its earnings.
WEATHERFORD INT Price
WEATHERFORD INT Price | WEATHERFORD INT Quote
In order to cope with changing market conditions, Weatherford International has been aligning its organizational structure and cutting costs. The company continued with its reduction in force in the recently reported first quarter of 2016 – completing 78% of its latest 6,000 headcount reduction target, terminating operations at four of the planned nine manufacturing and service facilities for the year, and shutting down 26 operating and other facilities in North America.
Weatherford International intends to reduce its 2016 costs by cutting another 2,000 jobs. The company also has plans to shut down 30 operating and other facilities by the end of this year, mostly by the end of the second quarter. Also, Weatherford International has reduced its full-year guidance for capital expenditures to $250 million. This is 63% and 83% lower than its spending levels in 2015 and 2014, respectively.
We believe, the measures undertaken by Weatherford International to reduce costs, both through direct cost reduction in view of the major downturn as well as by streamlining its overall cost structure, should result in a more efficient and better-run company going forward. With revenues projected to surpass its peers, this could lead to improved earnings performance by the end of 2016.
The company currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the same space are CVR Refining, LP , Braskem S.A. (BAK - Free Report) and North Atlantic Drilling Limited . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>