NEW YORK ( TheStreet) -- Ultra Petroleum Corporation (NYSE: UPL) 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, generally weak debt management, disappointing return on equity and weak operating cash flow.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
- ULTRA PETROLEUM CORP 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. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, ULTRA PETROLEUM CORP reported lower earnings of $2.94 versus $3.01 in the prior year. For the next year, the market is expecting a contraction of 57.5% in earnings ($1.25 versus $2.94).
- 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 1246.8% when compared to the same quarter one year ago, falling from $103.51 million to -$1,186.98 million.
- The debt-to-equity ratio is very high at 4.33 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with this, the company manages to maintain a quick ratio of 0.20, which clearly demonstrates the inability to cover short-term cash needs.
- 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, ULTRA PETROLEUM CORP'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 $138.35 million or 52.74% when compared to the same quarter last year. Despite a decrease in cash flow of 52.74%, ULTRA PETROLEUM CORP is in line with the industry average cash flow growth rate of -53.87%.
-- Written by a member of TheStreet Ratings Staff