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The Effect of Rig Count on Weatherford International

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Nov. 20 2020, Updated 2:21 p.m. ET

Weatherford International’s North American revenues

In the past year, Weatherford International’s (WFT) revenue share from North America has risen to ~38.0% compared to 37.0% in 4Q16. In 1Q17, its international revenue share was 62.0%. You can read more about WFT’s 1Q17 financial performance in Market Realist’s Weatherford International’s 1Q17 Earnings Beat Estimates.

By comparison, Schlumberger’s (SLB) 1Q17 North American revenue share was 28.0%, while Halliburton’s (HAL) was 52.0% and Baker Hughes’s (BHI) was 31.0%. WFT makes up 0.020% of the iShares Russell 3000 (IWV), which rose 17.0% in the past year compared to a ~30.0% fall in WFT stock in that same period.

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Rig count effect

As of March 31, 2017, the US rig count rose 78.0% from the previous year. From March 31, 2017, through the week ended June 2, 2017, the count rose 11.0% to close at 916. A higher rig count could boost WFT’s revenues and earnings in 2Q17. In April 2017, the international rig count rose 1.0% over March 2017.

Next, let’s see how capex (capital expenditure) for US upstream companies affected WFT’s operating margin.

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