Why Anadarko Petroleum (APC) Stock Is Down Today

NEW YORK (TheStreet) -- Anadarko Petroleum (APC) was falling -2.6% to $106.75 Monday after Brent crude fell below $100 a barrel for the first time in more than a year.

Brent crude oil fell 1.1% to $99.70 a barrel, going as low as a 16-month low of $99.36 a barrel. U.S. crude fell to close to $92 a barrel, according to CNBC.

The lower crude prices followed reports that China's import growth fell for the second consecutive month in August.

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Shares of energy companies including Anadarko Petroleum, Newfield Exploration (NFX) , EOG Resources (EOG) , and Pioneer Natural Resources (PXD) are falling following the news of the lower crude prices.

TheStreet Ratings team rates ANADARKO PETROLEUM CORP as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ANADARKO PETROLEUM CORP (APC) 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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."

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

  • The revenue growth greatly exceeded the industry average of 3.5%. Since the same quarter one year prior, revenues rose by 27.5%. 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.
  • The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.78 is somewhat weak and could be cause for future problems.
  • 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 75.6% when compared to the same quarter one year ago, falling from $929.00 million to $227.00 million.
  • 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, ANADARKO PETROLEUM CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: APC Ratings Report

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