Weatherford International’s earnings
In 3Q16, analysts expect a $0.25 adjusted loss per share for Weatherford International (WFT). This forecast means Wall Street analysts expect WFT’s adjusted loss to improve marginally in the coming quarter from the 2Q16 adjusted loss of $0.28 per share. Higher US rig counts and partial crude oil price recovery could benefit WFT’s 3Q16 results. However, persistent pricing pressure, capex reductions among US upstream companies, and project cancellations should keep WFT’s 3Q16 earnings under pressure. WFT is expected to hold its 3Q16 earnings conference call on October 26.
Weatherford International’s earnings versus estimates
In 2Q16, Weatherford International’s adjusted loss beat analysts’ consensus estimates. As the graph above notes, Weatherford International’s adjusted earnings per share (or EPS) exceeded estimates in many past quarters. On average, adjusted EPS exceeded consensus EPS by ~31% in the past 13 quarters.
In comparison, Schlumberger’s (SLB) 3Q16 estimated earnings are expected to decline marginally over its 2Q16 adjusted earnings. SLB’s market capitalization stands at $113.4 billion compared to WFT’s $5.5 billion. WFT is 0.34% of the iShares S&P Mid-Cap 400 Value ETF (IJJ). The energy sector makes up 7.5% of IJJ. Read more about Wall Street analysts’ estimates for oilfield services companies in Market Realist’s Wall Street’s Pick: Best and Worst OFS Stocks for 3Q16.
How dependent is Weatherford International’s business on the US rig count? We discuss that question next in this series.