NEW YORK (TheStreet) -- Weatherford International (WFT) - Get Weatherford International plc Report shares are down 3.98% to $10.76 in trading on Wednesday after the oil services company announced that it was eliminating its COO position today, according to Reuters.
The company said the move was in response to falling global oil prices which have declined more that 60% since June. Current COO Dharmesh Mehta will transition to the role of executive vice president for corporate strategy.
Some of the largest oil companies in the world have also recently cut capital expenditures and jobs in response to declining oil prices.
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TheStreet Ratings team rates WEATHERFORD INTL PLC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate WEATHERFORD INTL PLC (WFT) a SELL. This is driven by multiple 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 generally high debt management risk, disappointing return on equity, generally disappointing historical performance in the stock itself and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio of 1.11 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, WFT maintains a poor quick ratio of 0.80, which illustrates the inability to avoid short-term cash problems.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, WEATHERFORD INTL PLC's return on equity significantly trails that of both the industry average and the S&P 500.
- WFT has underperformed the S&P 500 Index, declining 21.91% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for WEATHERFORD INTL PLC is currently lower than what is desirable, coming in at 34.02%. Regardless of WFT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.98% trails the industry average.
- Net operating cash flow has slightly increased to $350.00 million or 7.36% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.20%.
- You can view the full analysis from the report here: WFT Ratings Report