NEW YORK (TheStreet) -- Halliburton (HAL - Get Report) shares are down 1.96% to $40.97 in morning trading on Monday after the oilfield services company received a second government request for more information concerning its proposed $34.6 million purchase of rival Baker Hughes (BHI).
The European Commission joined the U.S. Department of Justice in requesting more information about the deal according to a company statement today.
The company announced that it has certified substantial compliance with the Justice Department's second request for additional information about the deal.
Halliburton said it filed its standard notification form for merger approval from the European Commission on July 23 and received a request for more information from that commission on July 31.
The commission considers the missing information to be necessary to complete the deal's review process and Halliburton said that it will work cooperatively to provide the regulators with the necessary information.
Halliburton announced the purchase of Baker Hughes in November and the deal is still expected to close later this year, according to Halliburton.
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, reasonable valuation levels and good cash flow from operations. 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 1.69, 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 22.4%. Since the same quarter one year prior, revenues fell by 26.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for HALLIBURTON CO is rather low; currently it is at 19.29%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.91% trails that of the industry average.
- 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. 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