NEW YORK ( TheStreet) -- Royale Energy (Nasdaq: ROYL) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity and weak operating cash flow. Highlights from the ratings report include:
- ROYALE ENERGY INC has exprienced 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 reported a trend of declining earnings per share over the past two years. During the past fiscal year, ROYALE ENERGY INC swung to a loss, reporting -$0.39 versus $0.11 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1324.9% when compared to the same quarter one year ago, falling from $0.33 million to -$4.03 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ROYALE ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$0.51 million or 118.47% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- ROYL, with its decline in revenue, underperformed when compared the industry average of 14.6%. Since the same quarter one year prior, revenues fell by 15.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
-- Written by a member of TheStreet Ratings Staff