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Why Quicksilver Resources (KWK) Stock Is Down Today

NEW YORK (TheStreet) -- Quicksilver Resources (KWK) was falling -8.6% to $2.96 Tuesday after missing analysts' expectations for earnings and revenue in the first quarter.

Quicksilver reported a loss of -8 cents a share for the first quarter, missing the Capital IQ Consensus Estimate of a loss of -7 cents a share by 1 cent. Revenue fell -22.7% year-over-year to $91.78 million for the quarter. Analysts expected revenue of $105.26 million for the quarter.

Production for the quarter was 22.1 Bcfe, or an average of 246 million cubic feet of natural gas equivalent a day (MMcfed), down from 32.2 Bcfed, or an average of 358 MMcfed in the year-ago quarter.

Looking forward to the second quarter Quicksilver Resources expects an average daily production value of 255 MMcfed to 260 MMcfed.

Must read: Warren Buffett's 10 Favorite Growth Stocks

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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 a number of negative factors, 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 $29.40 million or 65.94% 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. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, QUICKSILVER RESOURCES INC turned its bottom line around by earning $0.90 versus -$13.83 in the prior year. For the next year, the market is expecting a contraction of 128.9% in earnings (-$0.26 versus $0.90).
  • The revenue fell significantly faster than the industry average of 0.2%. Since the same quarter one year prior, revenues fell by 49.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • 36.67% is the gross profit margin for QUICKSILVER RESOURCES INC which we consider to be strong. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -27.81% is in-line with the industry average.
  • 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 94.2% when compared to the same quarter one year prior, rising from -$548.50 million to -$31.78 million.
  • 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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