InterOil Corporation Stock Downgraded (IOC)

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NEW YORK ( TheStreet) -- InterOil Corporation (NYSE: IOC) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, feeble growth in its earnings per share, unimpressive growth in net income, poor profit margins and weak operating cash flow.

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Highlights from the ratings report include:
  • The share price of INTEROIL CORP has not done very well: it is down 22.69% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • INTEROIL CORP has experienced 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, INTEROIL CORP reported lower earnings of $0.02 versus $0.34 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 218.4% when compared to the same quarter one year ago, falling from $5.34 million to -$6.32 million.
  • The gross profit margin for INTEROIL CORP is currently extremely low, coming in at 9.93%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.07% trails that of the industry average.
  • Net operating cash flow has decreased to $26.14 million or 11.68% 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.

InterOil Corporation operates as an integrated oil and gas company in Papua New Guinea. The company operates in four segments: Upstream, Midstream, Downstream, and Corporate. The company has a P/E ratio of 752.8, above the S&P 500 P/E ratio of 17.7. InterOil has a market cap of $2.21 billion and is part of the basic materials sector and energy industry. Shares are down 12.2% year to date as of the close of trading on Wednesday.

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

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