Weatherford International public limited company, together with its subsidiaries, operates as a multinational oilfield service company worldwide. It offers equipment and services used in the drilling, evaluation, completion, production, and intervention of oil and natural gas wells. The company operates through three business groups: Formation Evaluation and Well Construction, Completion and Production, and Land Drilling Rigs. The Formation Evaluation and Well Construction business group provides managed-pressure drilling, drilling services, tubular running services, drilling tools and rental equipment, wireline services, testing and production services, re-entry and fishing services, cementing products, liner systems, reservoir solutions, and surface logging systems. The Completion and Production business group offers artificial lift systems, and stimulation and completion systems. The Land Drilling Rigs business group provides onshore contract drilling services and related operations, as well as operates a fleet of land drilling and workover rigs. Weatherford International public limited company was founded in 1972 and is headquartered in Baar, Switzerland.
Business Analysis of Weatherford International
The Oil & Gas Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Weatherford International compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Weatherford International to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Weatherford International with an interactive chart.
- Revenue Growth: Weatherford International reported a revenue growth of -39.1% year-on-year during 2016. Oil & Gas Equipment and Services Industry grew at -33.3% in the same period
- COGS share of Revenues: As a percentage of revenue, Weatherford International spent 90.3% of its total revenues on COGS. Oil & Gas Equipment and Services industry average (COGS share of revenue) in the same period was 82.2%
- R&D share of Revenues: As a percentage of revenue, Weatherford International spent 2.8% of its total revenues on R&D. Oil & Gas Equipment and Services industry average R&D spending in the same period was 1.6%
- SG&A share of Revenues: As a percentage of revenue, Weatherford International spent 19.3% of its total revenues on Sales, Marketing, and General Administration (SG&A). Oil & Gas Equipment and Services industry average SG&A spending in the same period was 8.3%
- Inventory share of Revenues: As a percentage of revenue, Weatherford International spent 31.3% of its total revenues on Inventories. Oil & Gas Equipment and Services industry average Inventory spending in the same period was 16.1%
- Accounts Payable share of Revenues: As a percentage of revenue, Weatherford International invested 14.7% of its total revenues on Accounts Payable (A/P) Oil & Gas Equipment and Services industry average Accounts Payable investment in the same period was 16.8%
- Accounts Receivable share of Revenues: As a percentage of revenue, Weatherford International invested 24.1% of its total revenues on Accounts Receivable (A/R). Oil & Gas Equipment and Services industry average Accounts Receivable investment in the same period was 26.6%
- PP&E share of Revenues: As a percentage of revenue, Weatherford International invested 77.9% of its total revenues on Property, Plants, and Equipments (PP&E). Oil & Gas Equipment and Services industry average PPE investment in the same period was 127.7%
- Intangibles share of Revenues: As a percentage of revenue, Weatherford International invested 53.0% of its total revenues on Intangibles. Oil & Gas Equipment and Services industry average Intangibles investment in the same period was 56.5%
- Net Margins: Weatherford International Net Margins in the year 2016 were -59.0%. Oil & Gas Equipment and Services industry average Net Margins in the same period were -18.4%
Sector and Industry Association of Weatherford International
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Weatherford International is associated with Oil & Gas Sector and Oil & Gas Equipment and Services Industry.
Oil & Gas sector is comprised of the following industries: Oil & Gas Production; Oil & Gas Distribution; Oil & Gas Equipment and Services; Alternative Energy. The definitions for each of the industries is as follows:
- Oil & Gas Production industry includes companies primarily engaged in operating oil & gas properties. Key activities may include exploration for crude petroleum and natural gas; drilling, completing, and equipping wells; and all other activities in the preparation of oil and gas up to the point of shipment from the producing property. It also includes companies engaged in crude petroleum refining and producing gasoline, kerosene, distillate fuel oils, residual fuel oils, and lubricants, through fractionation or straight distillation of crude oil.
- Oil & Gas Distribution industry includes companies primarily engaged in the pipeline transportation of petroleum, natural gas, and other commodities. It also includes companies primarily engaged in the wholesale and retail distribution of petroleum and petroleum products.
- Oil & Gas Equipment and Services industry includes companies primarily engaged in drilling wells for oil or gas field operations for others on a contract or fee basis. It also includes companies providing exploration services and machinery & equipment for oil and gas field operations.
- Alternative Energy industry includes companies that develop or manufacture renewable energy equipment utilizing sources such as solar, wind, geothermal, hydro, and waves. It also includes companies that produce alternative fuels such as methanol, ethanol, hydrogen and biofuels that are mainly used to power vehicles.
Industry Ranking of Weatherford International
With $5.7 billion revenues, Weatherford International ranked number 5 of all the companies in the US Oil & Gas Equipment and Services industry. There were a total of 55 public companies in the US Oil & Gas Equipment and Services industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Oil & Gas Equipment and Services industry by revenues during 2016 were:
- Schlumberger ($27.8 billion)
- Halliburton ($15.9 billion)
- Baker Hughes ($9.8 billion)
- National Oilwell Varco ($7.3 billion)
- Weatherford International ($5.7 billion)
- Transocean ($4.2 billion)
- Ensco ($2.8 billion)
- McDermott International ($2.6 billion)
- Noble Corp ($2.3 billion)
- Oceaneering International ($2.3 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.
- Conduct a holistic benchmarking; to identify and target additional sources of value
- Get in touch with us to learn more about Business Model Analysis Framework
- Get free data, charts, and analysis of Weatherford Internationaland its peers on select key performance indicators by clicking the reports provided below