Seadrill (SDRL) Stock Slumping on 'Challenging' Industry Outlook

NEW YORK (TheStreet) -- Shares of Seadrill Ltd. (SDRL) are down by 6.05% to $11.96 in late morning trading on Thursday, after the offshore drilling contractor said it believes challenges facing the rig market due to the collapse in oil prices are likely to remain going into next year.

"The industry continues to face challenging times and while the first quarter performance has been solid we are not immune from the wider industry challenges. Indications suggest the remainder of 2015 will see subdued market conditions and the challenging market continuing into 2016," Seadrill CEO Per Wullf said in a statement.

Seadrill is controlled by shipping billionaire John Fredrikson, and is the second largest offshore drilling company by volume in the world.

The company is currently dealing with a decline in demand from oil companies due to the retreat in oil prices, Bloomberg reports.

This morning, Seadrill reported better than expected earnings for the 2015 first quarter of 86 cents per diluted share. Analysts were expecting earnings of 63 cents per share for the period.

Revenue was $1.24 billion for the most recent quarter, just missing the $1.26 billion analysts had forecast.

Separately, TheStreet Ratings team rates SEADRILL LTD as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate SEADRILL LTD (SDRL) 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 notable return on equity, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself."

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