Linn reported a net loss of $784.55 million, or $3.15 a share, wider than net loss of $187.5 million, or 83 cents a share, in the same period one year earlier. The figures included non-cash impairment charges of $790 million, or $3.16 a share, and non-cash changes in fair value of unsettled commodity derivatives of approximately $44 million, or 18 cents a share.
Revenue also increased year over year to $629.21 million from $571.23 million.
Analysts polled by Thomson Reuters expected earnings of 27 cents a share on revenue of $627.29 million. These estimates usually exclude items.
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Howard Weil also downgraded Linn to "sector outperform" from "focus stock" on Thursday. The firm noted that the quarter did not meet its expectations.
TheStreet Ratings team rates LINN ENERGY LLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate LINN ENERGY LLC (LINE) 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 robust revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- LINE's very impressive revenue growth greatly exceeded the industry average of 3.3%. Since the same quarter one year prior, revenues leaped by 923.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 93.0% when compared to the same quarter one year prior, rising from -$430.01 million to -$30.06 million.
- LINN ENERGY LLC 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, LINN ENERGY LLC swung to a loss, reporting -$1.86 versus $2.21 in the prior year. This year, the market expects an improvement in earnings ($1.07 versus -$1.86).
- LINE has underperformed the S&P 500 Index, declining 9.34% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- Currently the debt-to-equity ratio of 1.61 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.46, which clearly demonstrates the inability to cover short-term cash needs.You can view the full analysis from the report here: LINE Ratings Report