Ahead of the Bell: Weatherford International
NEW YORK (AP) — Weatherford International Inc. appears headed for a new four-year low Tuesday, a day after the oilfield services company reported lower than expected third-quarter revenue.
The Swiss company said its revenue in the quarter that ended Sept. 30 rose 2 percent to $3.82 billion, but still fell short of the $3.9 billion that analysts polled by FactSet expected.
The company did not report full financial results because of accounting issues that have led it to revise its results from numerous periods. Only its income before taxes was reported until it can correct the discrepancies.
The company said it also uncovered "material weakness in internal controls over financial reporting related to the accounting for a percentage of completion contract in Iraq" and took write-downs in the first and second quarters because of them.
Sterne Agee analyst Stephen D. Gengaro added that Weatherford's business in the Middle East, North Africa and Asia region continues to suffer, with much lower margins than expected.
"Weatherford has obviously suffered from poor management over the last several years, and the road to improvement has been bumpy and expensive," the analyst wrote. "That said, the additional impairment charges, restatements and material weakness in Iraq are all part of the process Weatherford has taken toward completely cleaning up the company."
The company is expected to provide more detail on the quarter Tuesday when it hosts a conference call with analysts.
Shares lost $1.03, or 9.5 percent, to $9.85 a half-hour before the opening bell. It last hit that price in late 2008. The stock's low for the past year is $10.59.