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Weatherford Fixing Its Credibility Gap, But Now Market Conditions Weigh Heavily

Things were going pretty well for Weatherford (WFT) six months ago. Management was making real progress with its efforts to streamline the business and reduce costs and talk of substantial free cash flow generation was just what Wall Street wanted to hear.

And then it all went south. Management communication issues over its free cash flow guidance brought back bad memories for a lot of investors and the steep fall in oil prices has gutted E&P budgets for 2015 and expectations for earnings in the oil services sector.

I continue to believe that Weatherford is a legitimate self-improvement story. While the sharp decline in oil prices will lengthen the timeline to meaningful cash flow, management has continued to make good decisions with respect to the company's cost base and business mix.

So-So Results As Things Start To Slow Down

While companies like Cameron (CAM) and RPC (RES) are going into… Read More …