Energy Losers: Weatherford Dip Echoes Halliburton

Oil service company Weatherford posts earnings in line with expectations, but revenues fall short and shares fall in Tuesday's pre-market.
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NEW YORK (

TheStreet

) -- Oil service-sector earnings are off to an uncertain start. On Tuesday morning,

Weatherford International

(WFT) - Get Report

posted earnings one penny ahead of the Street consensus, but revenue roughly $500 million below what the Street was looking for in the third quarter. Expectations headed into the Weatherford earnings were generally positive, as they had been on Monday when

Halliburton

(HAL) - Get Report

kicked off oil-service sector reporting.

Weatherford shares were down by more than 4% in the pre-market after its earnings report. Halliburton shares slipped by more than 5% on Monday, even on good earnings -- expectations for Halliburton had crept up above consensus in the weeks preceding its earnings report.

The Halliburton and Weatherford reports both showed the continued strength of North America in driving earnings for the oil-service companies, and the continued lag from international markets.

>>Energy Losers: Has Halliburton Peaked?

Weatherford said in its earnings release that "the fourth quarter and 2011 will continue to show additional improvement," but that the pre-market action was not as bullish as the company outlook. Weatherford is making the case that improved market conditions in Mexico and the Middle East, coupled with continued strength in North America, South America and Russia, should drive improved results through 2011.

Weatherford's estimate for fourth-quarter earnings matched the Street consensus, at 23 cents. Weatherford's 2011 full-year estimate is ahead of the Street consensus of $1.17, guiding to $1.30 per share earnings.

In all of the markets outside of North America, revenue was flat to down in the third quarter. Weatherford's MENA revenue was flat; its Europe/West Africa revenues down 2%; and its Latin America revenues down 18% versus the prior quarter. Latin America was the only global region where Weatherford operating income rose sequentially.

Results from

Schlumberger

(SLB) - Get Report

and

Baker Hughes

(BHI)

are still to come, but the early results from the oil-service companies show a fickle investor set.

-- Written by Eric Rosenbaum from New York.

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>>Energy Losers: Has Halliburton Peaked?

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