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Why Did Weatherford International’s Stock Price Jump?

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Weatherford International’s stock price reaction

Weatherford International (WFT) released its financial results for 4Q16 on February 1, 2016. On that day, its stock remained nearly unchanged at $5.18 compared to the previous day’s close. However, on February 2, WFT’s stock price jumped 11% following its update on further workforce restructuring during its earnings conference call. WFT reduced its workforce by about 1,000 in 4Q16.

Schlumberger (SLB), the largest oilfield equipment and services (or OFS) company by market capitalization, was down 1% following the release of its financial information for 4Q16 on January 20. Read Market Realist’s Why Did Schlumberger’s 4Q16 Earnings Beat Estimates? to know more about Schlumberger’s 4Q16 earnings.

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WFT’s stock price returns compared to industry average

Over the past one year, Weatherford International’s stock has fallen 18% as of February 1. In the past one year, WFT has underperformed the VanEck Vectors Oil Services ETF (OIH), which has generated ~41% returns. The Energy Select Sector SPDR ETF (XLE), the broader energy industry ETF, has produced 26% returns. Weatherford International has also underperformed the SPDR S&P 500 ETF (SPY), which has produced 18% returns during the same period.

What can drive WFT in the future?

WFT has received contracts, as well as initiated other projects that can drive the company in the future. These include:

  • Weatherford won a one-year extendable contract in the U.S. Gulf of Mexico.
  • In the North Sea region in Europe, WFT won a three-year contract for integrated services on a drilling rig.
  • WFT owned a three-year coiled-tubing services contract for a national oil company in the Middle East.

Next, we will discuss Wall Street analysts’ targets for Weatherford International.

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