NEW YORK (TheStreet) -- Shares of Rice Energy (RICE) are slumping, down 5.81% to $23.66 on heavy volume in late morning trading Wednesday after the company priced its secondary offering of common stock.
The independent natural gas and oil company announced that it has priced an underwritten public offering of 6 million shares of its common stock owned by NGP Rice Holdings LLC at $24.20 per share.
The selling stockholders have also granted a 30-day option for underwriters to purchase up to an additional 900,000 shares.
Goldman Sachs & Co. and Citigroup are acting as joint book-running managers of the offering.
The selling stockholder will receive the net proceeds from the offering.
Yesterday, Rice Energy had its price target raised by analysts at Stephens to $28 from $22. The firm maintained its "overweight" rating.
About 3.37 million shares have exchanged hands as of 11:26 a.m. ET today, compared to its average trading volume of about 1.64 million shares a day.
Canonsburg, Pa.-based Rice Energy is an independent natural gas and oil company engaged in the acquisition, exploration and development of natural gas and oil properties in the Appalachian Basin.
Separately, TheStreet Ratings team rates RICE ENERGY INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate RICE ENERGY INC (RICE) a SELL. This is driven by a few notable weaknesses, 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 generally disappointing historical performance in the stock itself, deteriorating net income and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The share price of RICE ENERGY INC has not done very well: it is down 18.38% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- 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 99.9% when compared to the same quarter one year ago, falling from $129.45 million to $0.15 million.
- RICE ENERGY INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from 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, RICE ENERGY INC turned its bottom line around by earning $1.67 versus -$0.12 in the prior year. For the next year, the market is expecting a contraction of 100.0% in earnings ($0.00 versus $1.67).
- The gross profit margin for RICE ENERGY INC is rather high; currently it is at 68.91%. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 0.13% trails the industry average.
- The revenue growth greatly exceeded the industry average of 37.8%. Since the same quarter one year prior, revenues rose by 21.1%. 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.
- You can view the full analysis from the report here: RICE Ratings Report