Why Oil States International (OIS) Is Down Today

NEW YORK (TheStreet) -- Oil States International  (OIS) was dropping 5.61% to $94.80 on Thursday after the company announced fourth-quarter results that came up short of analysts' expectations.

Oil States International reported net income from continuing operations of $77.9 million, or $1.40 a share, down from $87 million, or $1.57 a share, in the same quarter a year earlier. The period included after-tax charges of 7 cents a share for transaction costs incurred and losses on debt extinguishment. Net earnings were $1.34 a share, down from $1.78 a year earlier. Revenue declined year over year to $675.18 million from $687.04 million.

Analysts polled by Thomson Reuters expected EPS of $1.49 on revenue of $695.8 million.

TheStreet Ratings team rates OIL STATES INTL INC as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about its recommendation:

"We rate OIL STATES INTL INC (OIS) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and feeble growth in the company's earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 61.6% when compared to the same quarter one year prior, rising from $103.79 million to $167.74 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.2%. Since the same quarter one year prior, revenues slightly increased by 5.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • OIL STATES INTL INC's earnings per share declined by 21.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OIL STATES INTL INC increased its bottom line by earning $7.46 versus $5.86 in the prior year. For the next year, the market is expecting a contraction of 16.4% in earnings ($6.24 versus $7.46).
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Energy Equipment & Services industry and the overall market, OIL STATES INTL INC's return on equity is below that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: OIS Ratings Report

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