Weatherford International Earnings: International Production Activity Drives Strong Performance

No-moat Weatherford posted another strong quarter, with total revenue increasing 20% year over year and 7% sequentially. The firmwide adjusted EBITDA margin held steady at 23% and will likely remain at a similar level through year-end. After incorporating second-quarter results, we’re raising our fair value estimate to $67 from $62 based on an improved outlook for Weatherford’s international operations, particularly the Middle East and Latin America. Management raised guidance for full-year guidance for revenue, now estimating mid- to high-single-digit growth year over year. It raised guidance for adjusted EBITDA margin by 100 basis points, implying year-over-year profitability improvements of at least 350 basis points year over year.