As reported by BEN LEFEBVRE of the Wall Street Journal, Weatherford International Ltd. said Tuesday that accounting errors will mean that investors should no longer rely upon its previously issued financial statements, sending the oil-field-services company’s share price plummeting despite fourth-quarter revenue rising more than expected.
Shares were 11% lower at $15.87 in midday trading as the company said it hasn’t remediated its previously disclosed material weakness in internal controls over financial reporting for income taxes.
As a result, Weatherford expects roughly $225 million to $250 million of net adjustments to previously reported financial results for 2010 and earlier. Two-thirds of the adjustments will be applied to fiscal quarters prior to the end of 2008, the company said.
Houston-based Weatherford said it will file restated financial statements for 2009 and 2010 “as soon as practicable.” The refilings will include information pertaining to its finances in 2007 and 2008, the company said.
After reviewing its internal controls, Weatherford estimates its 2012 tax rate will be 35%. Its expects to pay $490 million to $520 million in taxes for 2011, higher than analysts had expected.
Despite Weatherford’s revenue reaching new highs amid a boom in North American oil-and-gas development, the company’s bottom line has lagged behind rivals because of charges and weakness in its international operations.
“Misstatements/restatements are, once again, a prominent distraction that serve to nullify the positive momentum the company had been building over the past several quarters and a very positive operational fourth quarter,” said Simmons & Co. analyst Bill Herbert.