NEW YORK (TheStreet) -- Shares of Newpark Resources (NR - Get Report) were falling 14.7% to $5.27 on heavy trading volume after the oil and gas equipment and services warned of soft revenue in the third quarter.

Newpark Resources said it expects its Fluids Systems business results to remain "relatively flat" compared to second quarter levels. The company expects revenue of $14 million to $16 million in its Mats segment in the third quarter, with a near-even operating margin.

"While the continuing softness in Northeast region and the broader U.S. market are proving to be stronger headwinds than we anticipated, it's important to highlight that we remain optimistic regarding the long-term prospects for the mats business," President and CEO Paul Howes said in a statement.

The company also announced that it has been awarded a contract by Total (TOT - Get Report) to provide drilling fluid and related services for an exploratory ultra-deepwater well in Block 14 of offshore Uruguay. Newpark Resources expects the project to begin in the second quarter of 2016 and generate about $10 million of revenue.

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

"We rate NEWPARK RESOURCES (NR) 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:

  • NR's debt-to-equity ratio is very low at 0.30 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.80, which clearly demonstrates the ability to cover short-term cash needs.
  • NR, with its decline in revenue, underperformed when compared the industry average of 22.4%. Since the same quarter one year prior, revenues fell by 39.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for NEWPARK RESOURCES is rather low; currently it is at 19.76%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.59% is significantly below that of the industry average.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Energy Equipment & Services industry and the overall market, NEWPARK RESOURCES'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: NR