Energy Sector: Market Punished OFS Stocks the Most

Energy stocks

In the week ending on May 3, oilfield services stock Weatherford International (WFT) fell the most among the stocks in the energy space. The stocks are included in the following ETFs:

  • the Alerian MLP ETF (AMLP)
  • the Energy Select Sector SPDR ETF (XLE)
  • the VanEck Vectors Oil Services ETF (OIH)
  • the VanEck Vectors Oil Refiners ETF (CRAK)
  • the SPDR S&P Oil & Gas Exploration & Production ETF (XOP)

Energy Sector: Market Punished OFS Stocks the Most

A few foreign-headquartered integrated energy companies listed in the United States, including Imperial Oil (IMO) and China Petroleum & Chemical (SNP), are also on our list.

On April 30, Weatherford International announced that it completed the sale of its surface data logging business to Excellence Logging for $50 million in total consideration and laboratory services business to a group led by CSL Capital Management for $206 million in cash.

Other underperformers

Diamond Offshore Drilling (DO), Superior Energy Services (SPN), McDermott International (MDR), and Ensco Rowan (ESV) were the second, third, fourth, and fifth-highest losses among energy stocks last week. On April 25, Raymond James reduced its target price on Superior Energy Services by $2 to $6. On May 3, Superior Energy Services’ stock prices closed at $3.36.

On April 29, Diamond Offshore Drilling released its first-quarter earnings results. On a sequential basis, the loss contracted by 8.6%. The company reported a loss of $0.53 per diluted share, better than analysts’ consensus estimate for a loss of $0.59 per share.

On April 29, McDermott International reported an adjusted net income of $0.02 per share below analysts’ consensus estimate for an income of $0.07 per share. On May 1, Ensco Rowan released its first-quarter earnings results. The company reported an adjusted net loss of $1.69 per share—below analysts’ consensus estimate for a loss of $1.57 per share.

Apart from earnings sentiments, the oil rig count near more than its one-year low is a concern for the oilfield services subsector.