NEW YORK (TheStreet) -- Shares of Halliburton Co(HAL - Get Report) were lower by 0.52% to $45.49 in afternoon trading Monday, as both Brent and WTI crude prices fall to trade in negative territory, Reuters reports.
Oil prices are falling due to lower Chinese demand and concerns over the Organization of the Petroleum Exporting Countries' decision to pump without restraint, according to Reuters.
In May, China bought 25% less crude oil compared to the previous month. China is the world's top net oil importer, Reuters noted.
Last Friday, OPEC said it plans to keep its production target of 30 million barrels per day.
Brent crude for July delivery was lower by 0.87% to $62.76 a barrel as of 2:17 p.m. ET, while U.S. crude for July delivery was down 1.71% to $58.12 a barrel today.
Houston-based Halliburton is an oilfield services company that provides services and products to the energy industry related to the exploration, development, and production of oil and natural gas.
It serves national and independent oil and natural gas companies worldwide and operates under two segments.
Separately, 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.