NEW YORK (TheStreet) -- Shares of Seadrill were falling 2.8% to $12.23 Thursday as oil prices fall after OPEC's announcement of increased oil output in March. WTI crude oil for May delivery was down 1.4% to $55.63 a barrel early Thursday afternoon and Brent crude oil for June delivery was down 0.9% to $62.78 a barrel. On Thursday OPEC reported that its oil output increased to 810,000 barrels a day, according to Reuters. The increase was due to higher output in Saudi Arabia and Iraq as well as a production recovery in Libya. In the same report OPEC said that demand for its oil would be 80,000 barrels a day higher in 2015 than previously estimated due to lower prices curbing supplies in the U.S. and other countries. Seadrill is an offshore drilling company with operations in the U.S., the U.K., Indonesia, Norway, Malaysia, and other countries. TheStreet Ratings team rates SEADRILL LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation: "We rate SEADRILL LTD (SDRL) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself." Highlights from the analysis by TheStreet Ratings Team goes as follows: Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Energy Equipment & Services industry and the overall market, SEADRILL LTD's return on equity significantly exceeds that of both the industry average and the S&P 500. SDRL, with its decline in revenue, underperformed when compared the industry average of 15.0%. Since the same quarter one year prior, revenues fell by 14.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share. The debt-to-equity ratio of 1.35 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, SDRL has a quick ratio of 0.66, this demonstrates the lack of ability of the company to cover short-term liquidity needs. Net operating cash flow has decreased to $287.00 million or 41.66% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower. You can view the full analysis from the report here: SDRL Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015
Click to view a price quote on SDRL. Click to research the Energy industry.
from Latest TSC Headlines http://ift.tt/1CSi3YI
No comments:
Post a Comment