Why Key Energy Services (KEG) Is Down Today

NEW YORK (TheStreet) -- Key Energy Services (KEG) was falling -8.1% to $9.23 Thursday after missing analysts' expectations for revenue in the first quarter.

For the first quarter Key Energy reported a loss of -7 cents a share, in-line with the Capital IQ Consensus Estimate. Revenue fell -16.9% to $356.1 million. Analysts expected revenue of $372.83 million for the quarter.

"We are encouraged by the pace of U.S. well completion activity that we've seen since exiting the harsh winter season and by demand for our services in the Permian Basin, now predominantly driven by horizontal-directed activity," chairman, president, and CEO Dick Alario said in a press release. "Further, we are more optimistic about the long-term prospects for well intervention and recompletion activity for the aging horizontal oil shale well inventory. Given the pace of recent customer inquiries and tender activity, we believe customer spending will ramp up as we exit the second quarter and enter the second half of the year."

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TheStreet Ratings team rates KEY ENERGY SERVICES INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate KEY ENERGY SERVICES INC (KEG) 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 solid stock price performance and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."

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