Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share and deteriorating net income.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 1.1%. Since the same quarter one year prior, revenues rose by 13.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has increased to $1,159.00 million or 13.62% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.72%.
- Compared to its closing price of one year ago, NXY's share price has jumped by 35.19%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- NEXEN INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. During the past fiscal year, NEXEN INC reported lower earnings of $0.66 versus $1.09 in the prior year.
- 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 56.7% when compared to the same quarter one year ago, falling from $252.00 million to $109.00 million.
Nexen Inc. operates as an independent energy company worldwide. The company's Conventional Oil and Gas segment explores for, develops, and produces crude oil and natural gas from conventional sources. The company has a P/E ratio of 27.6, below the average energy industry P/E ratio of 27.7 and above the S&P 500 P/E ratio of 17.7. Nexen has a market cap of $13.46 billion and is part of the
industry. Shares are up 59.6% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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