NEW YORK ( TheStreet) -- Union Drilling (Nasdaq: UDRL) has been downgraded by TheStreet Ratings from hold to sell. Among the areas we feel are negative, one of the most important has been poor profit margins. Highlights from the ratings report include:
- The gross profit margin for UNION DRILLING INC is currently lower than what is desirable, coming in at 26.70%. Regardless of UDRL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, UDRL's net profit margin of -5.70% significantly underperformed when compared to the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Energy Equipment & Services industry and the overall market, UNION DRILLING INC's return on equity significantly trails that of both the industry average and the S&P 500.
- UNION DRILLING INC has improved earnings per share by 34.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNION DRILLING INC reported poor results of -$0.69 versus -$0.54 in the prior year. This year, the market expects an improvement in earnings (-$0.26 versus -$0.69).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Energy Equipment & Services industry average. The net income increased by 35.8% when compared to the same quarter one year prior, rising from -$5.34 million to -$3.43 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 46.7%. Since the same quarter one year prior, revenues rose by 37.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.