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TheStreet Open House

Why Quicksilver Resources (KWK) Is Down Today

NEW YORK (TheStreet) -- Quicksilver Resources (KWK) was falling 6.1% to $2.60 Friday after missing analysts' expectations for revenue in the fourth quarter.

For the fourth quarter Quicksilver posted a loss of 3 cents, which is in-line with analysts' expectations. Revenue fell 26.9% from the year-ago period to $114.24 million, missing analysts' estimates of $116.87 million for the quarter.

Production for the fourth quarter of 2013 was 24.5 Bcfe, or an average of 266 million cubic feet of natural gas equivalent per day (MMcfed). A year earlier, in the fourth quarter of 2012, the company produced 31.5 Bcfe, or an average of 342 MMcfed.

For the first quarter of 2014 Quicksilver expects daily production volume of between 240 MMcfed and 245 MMcfed.

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TheStreet Ratings team rates QUICKSILVER RESOURCES INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate QUICKSILVER RESOURCES INC (KWK) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly decreased to -$3.00 million or 107.15% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • QUICKSILVER RESOURCES 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, QUICKSILVER RESOURCES INC swung to a loss, reporting -$13.83 versus $0.50 in the prior year. This year, the market expects an improvement in earnings (-$0.18 versus -$13.83).
  • 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 101.3% when compared to the same quarter one year prior, rising from -$790.52 million to $10.58 million.
  • This stock has increased by 77.84% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in KWK do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • The gross profit margin for QUICKSILVER RESOURCES INC is rather high; currently it is at 50.25%. It has increased significantly from the same period last year. Along with this, the net profit margin of 6.90% is above that of the industry average.
  • You can view the full analysis from the report here: KWK Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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