NEW YORK (TheStreet) -- Shares of Weatherford International (WFT) are gaining 1.78% to $22.28 at the start of trading on Monday after the company announced it has agreed to sell its land drilling and workover operations in Russia and Venezuela to Rosenft (RNFTF) for $500 million in cash.
Rosenft is an integrated oil company majority owned by the Russian government.
The sale is part of Weatherford's plan to divest its non-core businesses, and is expected to close in the third quarter of 2014.
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Separately, TheStreet Ratings team rates WEATHERFORD INTL PLC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate WEATHERFORD INTL PLC (WFT) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, WFT's share price has jumped by 55.96%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- WEATHERFORD INTL PLC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, WEATHERFORD INTL PLC continued to lose money by earning -$0.44 versus -$1.02 in the prior year.
- The debt-to-equity ratio of 1.18 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 0.70, which illustrates the inability to avoid short-term cash problems.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Energy Equipment & Services industry. The net income has significantly decreased by 286.4% when compared to the same quarter one year ago, falling from $22.00 million to -$41.00 million.
- You can view the full analysis from the report here: WFT Ratings Report