Halliburton (HAL) Stock Falls on Lower Oil Prices

NEW YORK (TheStreet) -- Shares of Halliburton (HAL) are down 2% to $43.71 early Friday afternoon as oil prices were falling.

WTI crude oil for July delivery was down 1.8% to $59.38 a barrel early Friday afternoon, and Brent crude oil for August delivery was down 2.3% to $62.78 a barrel.

Oil prices were falling on Friday due to U.S. shale oil output forecasts, according to Reuters. U.S. shale producers expect their output to rise through the rest of the year, despite recent scale backs in response to lower oil prices.

Concerns over a possible Greece default also helped lower oil prices as it strengthened the dollar against the euro.

Halliburton is an American oil company with dual headquarters in Houston and Dubai. The company is one of the largest oil field services companies with operations in more than 80 countries.

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

"We rate HALLIBURTON CO (HAL) 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 largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins."

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

  • The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, HAL has a quick ratio of 1.75, which demonstrates the ability of the company to cover short-term liquidity needs.
  • HAL, with its decline in revenue, slightly underperformed the industry average of 1.7%. Since the same quarter one year prior, revenues slightly dropped by 4.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $812.00 million or 14.88% 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.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, HALLIBURTON CO's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • You can view the full analysis from the report here: HAL Ratings Report

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