It has been about a month since the last earnings report for Weatherford International PLC . Shares have lost about 9.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Weatherford Posts Wider-than-Expected Loss in Q1
Weatherford International reported first-quarter 2017 adjusted loss of $0.32 per share, wider than the Zacks Consensus Estimate of a loss of $0.31 as well as the year-earlier adjusted loss of $0.29 per share. The loss was mainly attributable to adverse impact of pressure pumping operations as well as lower product sales.
First-quarter total revenue decreased to $1,386.0 million from $1,585.0 million in the year-ago period. The reported figure, however, beat the Zacks Consensus Estimate of $1,370.0 million.
Operational Performance
North American revenues for the first quarter were $490 million, down 9.8% from the year-ago comparable quarter. The shutdown of U.S. pressure pumping operations adversely impacted revenues. Operating loss of $18 million was substantially narrower than an operating loss of $128 million in the prior-year quarter.
Middle East/North Africa/Asia posted revenues of $321 million, down 11.1% or $40 million from the year-earlier quarter. First-quarter operating loss of $3 million compared unfavorably with operating income of $6 million in the prior-year quarter. The decline in revenues is attributable to lower product sales across the region as well as continued pricing pressure and lower product sales.
Europe/West Africa/FSU posted revenues of $244 million, down 5.1% or $13 million from the year-earlier quarter. The decrease was mainly due to the normal first-quarter seasonality in the Norwegian Continental Shelf and parts of Russia. Operating loss in the reported quarter was $10 million, substantially wider than an operating loss of $1 million in the prior-year quarter.
Latin American revenues of $242 million were down $63 million or 20.6% year over year. First-quarter operating income was $9 million compared with $44 million in the year-ago period. Revenues declined primarily due to lower activity as well as project delays in Argentina as a result of a change in the compensation structure for union-based employees.
Liquidity
As of Mar 31, 2017, Weatherford had $546 million in cash and cash equivalents. It had long-term debt of $7,299 million. Weatherford spent approximately $40 million in capital expenditures during the reported quarter.
How have estimates been moving since then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to six lower. While looking back an additional 30 days, we can see even more downward momentum. There have been nine moves down in the last two months.
VGM Scores
At this time, Weatherford's stock has a subpar Growth Score of 'D', though it is lagging a bit on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Weatherford (WFT) Down 9.4% Since the Last Earnings Report?
It has been about a month since the last earnings report for Weatherford International PLC . Shares have lost about 9.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Weatherford Posts Wider-than-Expected Loss in Q1
Weatherford International reported first-quarter 2017 adjusted loss of $0.32 per share, wider than the Zacks Consensus Estimate of a loss of $0.31 as well as the year-earlier adjusted loss of $0.29 per share. The loss was mainly attributable to adverse impact of pressure pumping operations as well as lower product sales.
First-quarter total revenue decreased to $1,386.0 million from $1,585.0 million in the year-ago period. The reported figure, however, beat the Zacks Consensus Estimate of $1,370.0 million.
Operational Performance
North American revenues for the first quarter were $490 million, down 9.8% from the year-ago comparable quarter. The shutdown of U.S. pressure pumping operations adversely impacted revenues. Operating loss of $18 million was substantially narrower than an operating loss of $128 million in the prior-year quarter.
Middle East/North Africa/Asia posted revenues of $321 million, down 11.1% or $40 million from the year-earlier quarter. First-quarter operating loss of $3 million compared unfavorably with operating income of $6 million in the prior-year quarter. The decline in revenues is attributable to lower product sales across the region as well as continued pricing pressure and lower product sales.
Europe/West Africa/FSU posted revenues of $244 million, down 5.1% or $13 million from the year-earlier quarter. The decrease was mainly due to the normal first-quarter seasonality in the Norwegian Continental Shelf and parts of Russia. Operating loss in the reported quarter was $10 million, substantially wider than an operating loss of $1 million in the prior-year quarter.
Latin American revenues of $242 million were down $63 million or 20.6% year over year. First-quarter operating income was $9 million compared with $44 million in the year-ago period. Revenues declined primarily due to lower activity as well as project delays in Argentina as a result of a change in the compensation structure for union-based employees.
Liquidity
As of Mar 31, 2017, Weatherford had $546 million in cash and cash equivalents. It had long-term debt of $7,299 million. Weatherford spent approximately $40 million in capital expenditures during the reported quarter.
How have estimates been moving since then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to six lower. While looking back an additional 30 days, we can see even more downward momentum. There have been nine moves down in the last two months.
Weatherford International PLC Price and Consensus
Weatherford International PLC Price and Consensus | Weatherford International PLC Quote
VGM Scores
At this time, Weatherford's stock has a subpar Growth Score of 'D', though it is lagging a bit on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.