Weatherford Int'l. (WFT) Stock Is Falling Today as Oil Prices Drop

Weatherford Int'l. (WFT) is down Friday as oil prices decline after five days of gains.
By Lindsay Ingram ,

NEW YORK (TheStreet) -- Shares of oil and natural gas service company Weatherford International (WFT) - Get Report were falling 1.3% to $12.45 Friday as oil prices declined after five straight days of gains.

WTI crude oil for May delivery was down 3% to $49.91 Friday afternoon and Brent oil for May delivery was down 2.5% to $57.71 a barrel.

Oil prices were falling after bombing in Yemen continued overnight, but fears that the conflict would disrupt oil exports lessened, according to Reuters. Oil prices increased Thursday after airstrikes in Yemen sparked fears that it could disrupt world oil supplies.

Goldman Sachs said that the bombing will likely have little effect on oil supplies as Yemen was a small crude exporter and tankers can avoid passing the country on their way to other ports, according to Reuters.

TheStreet Ratings team rates WEATHERFORD INTL PLC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate WEATHERFORD INTL PLC (WFT) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Energy Equipment & Services industry. The net income has significantly decreased by 75.3% when compared to the same quarter one year ago, falling from -$271.00 million to -$475.00 million.
  • The debt-to-equity ratio of 1.08 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, WFT maintains a poor quick ratio of 0.87, which illustrates the inability to avoid short-term cash problems.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, WEATHERFORD INTL PLC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has decreased to $584.00 million or 11.78% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The gross profit margin for WEATHERFORD INTL PLC is currently lower than what is desirable, coming in at 31.04%. Regardless of WFT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, WFT's net profit margin of -12.74% significantly underperformed when compared to the industry average.
  • You can view the full analysis from the report here: WFT Ratings Report
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