Weatherford (NYSE: WFT) Plunges after Questioning its Own Accounting

Northern, WI 2/21/12 (StreetBeat) -- Oil services company Weatherford International (NYSE: WFT) told investors not to rely on its prior financial statements because of lax internal controls, putting a damper on an otherwise mixed earnings report. Shares fell 12% early.

Weatherford, which has seen gains in the past few months as North American oil and gas production has picked up, posted revenue of $3.71 billion, above expectations for $3.58 billion. The company did not provide its after-tax EPS but one analyst calculated that it was a slight miss.

““Assuming a tax rate of 35% (2012 guidance), WFT would have reported Q4/11 EPS, below consensus/our estimate at $0.33/$0.35,” wrote Cannacord Genuity analyst Scott Burk.” As expected, artificial lift and improved Canadian results were drivers of better revenue for the quarter. . .We’d expect the stock to give back some of its approximately 10% YTD outperformance on this negative quarterly result.”

The company will have to restate prior earnings to take into account “roughly $225 million to $250 million of aggregate net adjustments to previously reported financial results for the years 2010 and prior relating to the correction of errors identified with respect to the company’s accounting for income taxes.”

Earlier this month, Barrons.com published a generally positive story about the company highlighting the company’s prospects given increasing spending on energy exploration.

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