Over a year after announcing accounting problems in the tax department, Weatherford International (WFT) continues to struggle to complete the restatement. For investors, the most boggling aspect of the tax restatement is that the company moved headquarters to Switzerland in order to reduce tax liabilities, yet the company continues to incur the highest in the industry.
The international oil services provider guided to an effective tax rate of 45% for all of 2012. More importantly the guidance for 2013 is for the effective tax rate to drop to a more historical 34% rate. The real improvement will come in later years as the company finally benefits from expected reduced rates.
So how should investors value the earnings of a company with temporarily high tax rates? The market spoke with dramatically lower stock prices to the tune of a 52-week low.
Read the full article at Seeking Alpha.
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