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UPDATE: BMO Capital Downgrades Weatherford International to Underperform after Messy 4Q12 Results

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In a report published Friday, BMO Capital Markets downgraded its rating on Weatherford International (NYSE: WFT) from Market Perform to Underperform, and lowered its price target from $14.00 to $11.00.

BMO Capital Markets noted, “Weatherford (WFT) reported another messy quarter to close out 2012 as it continued to mop up its tax and other operational issues. Operating EPS of $0.1 was far below our $0.20 est. and consensus at $0.18 but in the scheme of things was largely irrelevant. Charges for professional fees ($43 mn), more Iraqi project hits ($64 mn) and a very high exit tax rate to balance the year were the big functional items. While its choke hold on ‘yesterday's' tax problems look largely established, they will go without official elimination of the material weakness. Reported improvement in working capital management and some FCF were profiled and a promise to eliminate FCP overhang in 2013 was good news. 1Q13 EPS guidance of $0.16-$0.18c with a 34% tax rate held some caveats as do other quarters (most notably on Iraq).”

Weatherford International closed on Thursday at $11.88.

Posted-In: BMO Capital MarketsAnalyst Color Downgrades Analyst Ratings


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