NEW YORK ( TheStreet) -- Barnwell Industries (AMEX: BRN) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and weak operating cash flow.

Highlights from the ratings report include:
  • The revenue fell significantly faster than the industry average of 23.6%. Since the same quarter one year prior, revenues fell by 18.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for BARNWELL INDUSTRIES is rather high; currently it is at 51.80%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, BRN's net profit margin of -18.40% significantly underperformed when compared to the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BARNWELL INDUSTRIES'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 $3.83 million or 8.32% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • 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 198.2% when compared to the same quarter one year ago, falling from $1.49 million to -$1.46 million.

Barnwell Industries, Inc., through its subsidiaries, engages in the oil and natural gas exploration, land investment, real estate, and contract drilling operations in the United States and Canada. Barnwell has a market cap of $39.8 million and is part of the basic materials sector and energy industry. Shares are up 38.3% year to date as of the close of trading on Tuesday.

You can view the full Barnwell Ratings Report or get investment ideas from our investment research center.
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