Looking at profitability is a very important step in understanding a company. Profitability is essentially why the company exists and a key component in deciding whether to invest or to remain invested in a company. There are many metrics involved in calculating profitability, but for this article, I will look at Weatherford International’s (WFT) earnings and earnings growth, profit margins, profitability ratios and cash flow and future rig utilization.
Through the above-mentioned metrics, we will get an idea about the company’s profitability over the past 5 years and a look at what to expect in the future.
By comparing this summary to other companies such as Schlumberger NV (SLB), Baker Hughes (BHI) and Halliburton Company (HAL) which are in the same sector, you will be able see which has been the most profitable.
Over the next few years, analysis at Bloomberg Businessweek are predicting a turnaround for the company. Analysts are estimating revenues for FY 2012 at $15.1 billion and a revenue for 2013 at $16.1 billion. They are also predicting EPS for FY 2012 at $0.69 and EPS for FY at $1.02.
As indicated above, Weatherford’s profitability has been declining over the past 5 years. In addition to this, the debt and liabilities have been increasing as stated in my article Analyzing Weatherford International’s Debt And Risk.
Jeff Williams is a published author, analyst and educator. As a private portfolio manager, Jeff is a value/dividend investor who focuses long-term growth. Jeff Williams specializes in fundamental analysis honing in on the relationships between debt ratios, assets, earnings and cash flow to find value. He lives in a beautiful seaside town in Canada with his wife and two boys.
This is not an offer to buy or sell securities. Oil investment carries with it very high risks. The information contained within this site has not been nor will it be verified by Turn Key Oil and is subject to change at any time. We are not a United States Securities Dealer or Broker or United States Investment Adviser. Do your own due diligence and consult with a licensed professional before making any investment decisions. Please read our full disclaimer before making any decisions.
