Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Weatherford International (NYS: WFT) fell 13% today after the company said it would be restating previous earnings.
So what: When the company released fourth-quarter earnings, it also dropped the bomb that it would be restating 2009 and 2010 financial statements. This news overshadowed a 27% jump in revenue to $3.71 billion and adjusted earnings of $0.30 per share.
Now what: Restatements are never good, and I've learned to run in the opposite direction when you hear they are coming. The company said it would need to adjust $225 million to $250 million of financial results from 2010 and earlier, most of it before 2008. Until we know exactly how these adjustments look, I would wait on the sidelines. It takes a long time for companies to regain a positive reputation after an adjustment like this, and shares could be in the doldrums for a while.
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At the time thisarticle was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.