NEW YORK (TheStreet) -- Union Drilling (Nasdaq:UDRL) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's profit margins have been poor overall. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 113.9% when compared to the same quarter one year prior, rising from -$4.44 million to $0.62 million.
- UDRL's revenue growth trails the industry average of 39.8%. Since the same quarter one year prior, revenues rose by 28.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- UNION DRILLING INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNION DRILLING INC reported poor results of -$0.69 versus -$0.54 in the prior year. This year, the market expects an improvement in earnings (-$0.23 versus -$0.69).
- 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, UNION DRILLING INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for UNION DRILLING INC is currently lower than what is desirable, coming in at 30.70%. Regardless of UDRL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, UDRL's net profit margin of 0.90% is significantly lower than the same period one year prior.
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