NEW YORK (TheStreet) -- Shares of Seadrill (SDRL) - Get Report were gaining 5.9% to $9.51 Wednesday after weekly U.S. crude oil data cause oil prices to rise.

WTI crude oil for September delivery was up 2.33% to $49.10 a barrel late Wednesday morning, and Brent crude oil for September delivery was up 1.26% to $53.97 a barrel.

The U.S. Energy Information Administration said U.S. crude oil stockpiles fell by 4.2 million barrels to 459.68 million in the week ending July 24. Analysts surveyed by Reuters expected stockpiles to decrease by 184,000 barrels in the week.

Crude imports fell by 396,000 barrel a day, with 2.7 million barrels imported in the week. Gasoline inventories fell by 363,000 barrels in the week, compared to analysts' expectations of an increase of 512,000 barrels.

Seadrill is an offshore drilling company with operations in the U.S., the U.K., Brazil, Norway, Thailand, Malaysia, and other countries. The company is scheduled to announce its second quarter results on August 27.

TheStreet Ratings team rates SEADRILL LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SEADRILL LTD (SDRL) 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, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

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

  • The revenue growth came in higher than the industry average of 22.1%. Since the same quarter one year prior, revenues slightly increased by 1.9%. 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.
  • Even though the current debt-to-equity ratio is 1.25, it is still below the industry average, suggesting that this level of debt is acceptable within the Energy Equipment & Services industry. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.82 is weak.
  • 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 86.1% when compared to the same quarter one year ago, falling from $3,068.00 million to $427.00 million.
  • 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. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, SEADRILL LTD's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: SDRL Ratings Report