Newfield Exploration (NFX) Stock Plummets on Falling Oil Prices

Newfield Exploration (NFX) stock is declining in late afternoon trading on Thursday, amid weakening oil prices.
By Amanda Albright ,

NEW YORK (TheStreet) -- Newfield Exploration  (NFX) stock is plunging by 4.01% to $38.10 in afternoon trading on Thursday, as oil prices fall and affect stocks within the sector.

Oil prices are slipping after an Energy Information Administration report showed that U.S. crude inventories rose by 4.2 million barrels last week, greater than analysts expectations for an increase of one million barrels, Reuters reported. 

WTI crude is down 2.89% to $41.69 per barrel, while Brent crude is decreasing 3.67% to $44.13 per barrel this afternoon, according to the CNBC.com index.

"It's another data point highlighting the oil glut in the U.S. or the global markets for that matter," Chris Jarvis, analyst at Caprock Risk Management, told Reuters.

Based in Houston, Newfield Exploration is an exploration and production company that operates in the U.S. and China. 

Separately, TheStreet Ratings team rates NEWFIELD EXPLORATION CO as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

We rate NEWFIELD EXPLORATION CO (NFX) a SELL. This is driven by a few notable 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. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.

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

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 541.4% when compared to the same quarter one year ago, falling from $278.00 million to -$1,227.00 million.
  • The debt-to-equity ratio of 1.23 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with this, the company manages to maintain a quick ratio of 0.38, which clearly demonstrates the inability to cover short-term cash needs.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, NEWFIELD EXPLORATION CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $312.00 million or 7.41% when compared to the same quarter last year. Despite a decrease in cash flow NEWFIELD EXPLORATION CO is still fairing well by exceeding its industry average cash flow growth rate of -27.14%.
  • NEWFIELD EXPLORATION CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, NEWFIELD EXPLORATION CO increased its bottom line by earning $4.70 versus $0.79 in the prior year. For the next year, the market is expecting a contraction of 82.8% in earnings ($0.81 versus $4.70).
  • You can view the full analysis from the report here: NFX

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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