Weatherford International Ltd Stock Hold Recommendation Reiterated (WFT)

NEW YORK (TheStreet) -- Weatherford International (NYSE:WFT) has been reitereated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.

Highlights from the ratings report include:

• The revenue growth came in higher than the industry average of 14.2%. Since the same quarter one year prior, revenues rose by 26.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
• WEATHERFORD INTERNATIONAL reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, WEATHERFORD INTERNATIONAL turned its bottom line around by earning $0.34 versus -$0.20 in the prior year. This year, the market expects an improvement in earnings ($1.20 versus $0.34).
• WFT's debt-to-equity ratio of 0.80 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.77 is weak.
• The gross profit margin for WEATHERFORD INTERNATIONAL is currently lower than what is desirable, coming in at 33.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.40% trails that of the industry average.
• WFT's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 33.19%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.

Weatherford International Ltd. provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells worldwide. The company has a P/E ratio of 26.7, below the average energy industry P/E ratio of 28and above the S&P 500 P/E ratio of 17.7. Weatherford International has a market cap of $9.14 billion and is part of the basic materials sector and energy industry. Shares are down 19.4% year to date as of the close of trading on Thursday.

You can view the full Weatherford International Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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