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Analyzing Weatherford International’s Growth Drivers in 3Q17

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Weatherford’s growth by geography

Weatherford International (WFT) saw robust revenue growth (a ~20% rise) from 3Q16 to 3Q17. On the other hand, WFT’s Latin America region declined the most (a 10.2% fall) during the period. Schlumberger’s (SLB) 3Q17 North America revenues rose 53% from 3Q16. WFT is 0.26% of the Vanguard Energy ETF (VDE). VDE declined 5% in the past year, compared to a 33% decrease in WFT’s stock price.

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Comparison with peers

In 3Q17, Weatherford International’s net loss was $251 million. In comparison, Schlumberger’s net loss was $556 million in 3Q17 while National Oilwell Varco’s (NOV) net loss was $27 million. Nabors Industries’ (NBR) net loss was $119 million in 3Q17. WFT is 2% of the VanEck Vectors Oil Services ETF (OIH), which decreased 26% in the past year versus a 23% fall in WFT’s stock price.

WFT’s 3Q17 growth drivers: Negatives

  • an operating profit decline due to a difficult situation in Venezuela
  • a decline in deeper-water offshore work activity in Sub-Saharan Africa
  • a loss of non-repeating product sales in Brazil

WFT’s 3Q17 growth drivers: Positives

  • an increase in completions-related work in Russia
  • a strong rise in revenues in WFT’s Well Construction, Completions, and Artificial Lift product lines
  • a lower-cost structure in the United States as well as increased activity levels in both the United States and Canada
  • recovery from the Canadian spring break-up
  • benefits from cost reductions in Sub-Saharan Africa
  • a favorable product mix in the North Sea

Next in this series, we’ll discuss how the US rig count can affect WFT’s 4Q17 financial results.

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