Weatherford International Ltd., an oilfield-services provider, fell the most in five months after failing to report post-tax second-quarter earnings because of investigations into the company’s financial reporting.
The shares slid 8.8 percent to $11.67 at the close in New York, the largest drop since February 21. The Geneva-based company has lost 20 percent of its market value this year.
Weatherford plans to revise financial statements from fiscal 2009, 2010 and 2011 due to a review of its tax accounting, according to a statement released after the close of regular trading yesterday. The new filings and its 2012 second-quarter report won’t be submitted by an August 9 deadline to the U.S. Securities & Exchange Commission, it said.
The company has identified $92 million of expenses from prior periods as well as $15 million in additional adjustments, Scott Gruber, an analyst at Sanford C. Bernstein & Co in New York, wrote today in a note to investors.
“Management’s inability to complete its financials and provide guidance on the company’s future tax rate will continue to weigh significantly on the stock,” he said.
Weatherford also announced yesterday it would take a $100 million charge in the second quarter to settle allegations of improper sales to nations with sanctions restricting trade. The charge represents “management’s best estimate of a potential settlement with the U.S. government related to its investigation of alleged improper sales in certain sanctioned countries,” according to the statement.
The U.S. Justice Department and SEC is investigating Weatherford’s participation in the United Nations’ oil-for-food program, according to a March 15 federal filing. The U.S. is also investigating the company’s compliance with the Foreign Corrupt Practices Act, the company said.