Weatherford International Ltd Stock Hold Recommendation Reiterated (WFT)

Editor's Note: 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.

NEW YORK ( TheStreet) -- Weatherford International (NYSE: WFT) has been reiterated 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 revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 2.5%. Since the same quarter one year prior, revenues rose by 13.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 56.77% to $231.00 million when compared to the same quarter last year. In addition, WEATHERFORD INTERNATIONAL has also vastly surpassed the industry average cash flow growth rate of -80.17%.
  • WEATHERFORD INTERNATIONAL's earnings per share declined by 43.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WEATHERFORD INTERNATIONAL turned its bottom line around by earning $0.25 versus -$0.29 in the prior year. This year, the market expects an improvement in earnings ($0.69 versus $0.25).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, WEATHERFORD INTERNATIONAL's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for WEATHERFORD INTERNATIONAL is currently lower than what is desirable, coming in at 30.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 1.83% trails that of the industry average.

Weatherford International Ltd. provides equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells worldwide. Weatherford International has a market cap of $10.15 billion and is part of the basic materials sector and energy industry. Shares are up 18.6% year to date as of the close of trading on Tuesday.

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.

It's Official: Action Alerts PLUS beats the S&P 500 with Dividends Reinvested! Cramer and Link were up 16.72% in 2012. Were you? See what they are trading for 14-days FREE

null

More from Markets

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

Video: What Oprah's Content Partnership With Apple Means for the Rest of Tech

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

REPLAY: Jim Cramer on the Markets, Oil, Starbucks, Tesla, Okta and Red Hat

Flashback Friday: The Market Movers

Flashback Friday: The Market Movers

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices

OPEC Deal Doesn't Boost Production Enough to Drive Down Crude, Gasoline Prices

Dow Posts First Gain in Nine Sessions; Oil Jumps

Dow Posts First Gain in Nine Sessions; Oil Jumps