Weatherford International Ltd. climbed the most in five years after reporting better-than-expected earnings and forecasting as much as $1 billion in divestiture proceeds by year-end amid a planned corporate turnaround.
The world’s fourth-largest oilfield services provider rose 11 percent to $20.47 at the close in New York, the most since Jan. 21, 2009.
The Geneva-based company reported earnings after the close of regular trading yesterday, excluding certain items, that beat the 11-cent average of 29 analysts’ estimates compiled by Bloomberg. Weatherford has previously named five businesses it’s looking to sell or split off and expects to generate $500 million to $1 billion in asset sales by the end of this year, Chief Executive Officer Bernard Duroc-Danner said today on a conference call.
“It’s the lack of bad news on the earnings front combined with the progress in the restructuring that’s really what’s pushing the stock,” Stephen Gengaro, an analyst at Sterne Agee & Leach in New York, who rates the shares a buy and owns none, said today in a phone interview. “Their track record of meeting expectations has been really poor.”
Prior to last year’s third quarter, Weatherford missed adjusted earnings-per-share estimates in 10 out of the past 11 quarters, according to data compiled by Bloomberg. The first quarter this year marks the third consecutive period of better-than-expected results.
“People have gone from being pessimistic to being cautiously optimistic to having some of the impediments to their optimism removed,” Gengaro said.
Weatherford expects second-quarter earnings per share to be in the range of 21 to 23 cents, higher than the 18-cent average of 28 analysts’ estimates compiled by Bloomberg.
The company, which has 15 buy ratings from analysts, 16 holds and two sells, is the second-best performer this year in the Philadelphia Oil Service Index, climbing 32 percent. Nabors Industries Ltd., the world’s largest land-rig contractor, climbed the most at 46 percent.
Schlumberger Ltd., Halliburton Co. and Baker Hughes Inc. are the world’s largest oilfield servicers.