Weatherford rebounds after hitting 4-year low
NEW YORK (AP) — Shares of Weatherford International rose in premarket trading Wednesday a day after hitting a four-year low, as a number of industry watchers saw a bottoming out at the oilfield services company.
Jefferies & Co. upgraded the company and shares rose 2 percent before the opening bell.
The company said Monday that third-quarter revenue that rose, but it wasn't as fast as Wall Street had expected. It didn't report full financial results because of accounting issues that have led it to revise numbers from previous quarters. Only its income before taxes is being 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.
Jefferies analyst Brad Handler said that the weakness seen in the third quarter suggests that investors shouldn't put too much stock in a quick improvement. But Handler was encouraged by efforts to lower capital spending and other initiatives. He lowered his earnings estimates and price target by $1, but upgraded the stock to "Hold" from "Underperform."
Sterne Agee analyst Stephen Gengaro said that while Weatherford's third-quarter earnings release was "certainly messy," it was "the culmination of an enormous amount work to understand and repair its financials."
He, like Handler, believes the company is now focused on shoring up parts of its business that have been weak in recent years. He thinks shares could rebound with any evidence of a stronger company.
Shares of Weatherford International Inc. rose 21 cents, or 2.3 percent, to $9.36 in premarket trading Wednesday. The stock hit a low of $9.02 on Tuesday.