NEW YORK (TheStreet) -- Shares of Noble Corp. (NE) are slumping, lower by 5% to $15.40 in early market trading on Wednesday, as oil prices continue to fall following the decision by the Organization of the Petroleum Exporting Countries to cut its forecast for global demand for its oil in 2015.
OPEC forecast demand for its oil to decline to 28.9 million barrels a day next year, down from 29.4 million barrels a day in 2014.
Yesterday, the U.S. Energy Information Administration lowered its forecast for international oil consumption in 2015 to 92.32 million barrels a day, lower than its previous estimate of 92.5 million barrels a day.
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OPEC has also recently announced that it would maintain its oil production target of 30 million barrels a day, which pushed oil prices down.
Brent crude prices are down by 2.48% to $65.18 per barrel, prices have not been lower than $65 since September 2009, Bloomberg noted.
Separately, TheStreet Ratings team rates NOBLE CORP PLC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate NOBLE CORP PLC (NE) 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, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 29.4%. 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 gross profit margin for NOBLE CORP PLC is rather high; currently it is at 51.82%. Regardless of NE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NE's net profit margin of 15.38% compares favorably to the industry average.
- Net operating cash flow has decreased to $356.48 million or 30.86% 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.
- 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 Energy Equipment & Services industry. The net income has significantly decreased by 54.5% when compared to the same quarter one year ago, falling from $280.55 million to $127.49 million.
- You can view the full analysis from the report here: NE Ratings Report