WTI crude oil for April delivery was falling 3% to $49.27 a barrel Monday afternoon, and Brent crude oil or April delivery was falling 2.4% to $58.78 a barrel.
Oil prices were falling as investors worried about excess crude supply, according to Bloomberg. The news site said some oversupply concerns are due to a pipeline in Libya that recently resumed pumping oil after it was halted by a fire.
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An ongoing refinery strike also helped bring oil prices lower, according to Bloomberg. The U.S. United Steelworkers union, which represents workers are more than 200 refineries, fuel terminals, pipelines, and chemical plants in the U.S., recently rejected seven contract offers from Royal Dutch Shell (RDS.A) , which is bargaining on behalf of other oil companies, including Exxon Mobil (XOM) and Chevron (CVX) .
The strike started on Feb. 1 at nine sites, and has since expanded to 12 refineries, and three other facilities that account for almost 20% of the U.S.'s refining capacity. The union said it plans to restart talks this week.
TheStreet Ratings team rates PRECISION DRILLING CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PRECISION DRILLING CORP (PDS) 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 revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.4%. Since the same quarter one year prior, revenues slightly increased by 9.1%. 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 $134.89 million or 42.81% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.89%.
- PDS's debt-to-equity ratio of 0.76 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
- PRECISION DRILLING CORP 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. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, PRECISION DRILLING CORP reported lower earnings of $0.12 versus $0.67 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 Energy Equipment & Services industry. The net income has significantly decreased by 267.9% when compared to the same quarter one year ago, falling from $67.92 million to -$114.04 million.
- You can view the full analysis from the report here: PDS Ratings Report