NEW YORK (TheStreet) -- Shares of Layne Christensen Co. (LAYN) are lower by -12.75% to $13 in pre-market trading on Monday after the company reported a decrease in revenue to $191.2 million for the 2015 first quarter, compared to $226.4 million for the same period last year.
The global water management, construction, and drilling company reported a net loss of -$27.7 million, or -$1.41 per share for the 2015 first quarter, versus a net loss of -$23.8 million, or -$1.24 per share for the 2014 first quarter.
Separately, TheStreet Ratings team rates LAYNE CHRISTENSEN CO as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate LAYNE CHRISTENSEN CO (LAYN) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Construction & Engineering industry and the overall market, LAYNE CHRISTENSEN CO'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 $2.02 million or 92.09% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for LAYNE CHRISTENSEN CO is rather low; currently it is at 16.90%. Regardless of LAYN's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, LAYN's net profit margin of -7.73% significantly underperformed when compared to the industry average.
- LAYN has underperformed the S&P 500 Index, declining 24.68% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- LAYN, with its decline in revenue, slightly underperformed the industry average of 12.7%. Since the same quarter one year prior, revenues fell by 19.2%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: LAYN Ratings Report