Stressed Out: Can Tidewater Sustain Today's Spike?

 | Feb 04, 2016 | 2:50 PM EST
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This article is part of a Real Money series on 20 companies investors should consider adding to their distressed watch list.

Shares of Tidewater (TDW) have experienced a pretty strong ebb for more than a year now as crude prices depress the entire oil sector. However, this week's flow is bringing the stock back to shore.

TDW was up around 16% in mid-afternoon trading Thursday. Though the stock rose slightly following the release of the company's third-quarter financial results on Tuesday, today's spike is a reversal from the stock's recent troubles.

On Tuesday, the provider of offshore service vessels reported a third-quarter net loss of seven cents a share, which was much better than the loss of 30 cents a share analysts were expecting the company to post for the period. However, revenue of $218.2 million fell short of analysts' $254.6 million consensus forecast.

Tidewater has fallen more than 82% in the past year. The company has acknowledged that the drop in customers' exploration activity due to oil's price decline is directly responsible for its income troubles. It reported a debt load of $1.5 billion during a December presentation, and while the bulk of the notes come due in 2020, its ability to meet those obligations during a prolonged period of low oil prices could be tenuous.

Last week, the company announced that its board approved a plan to suspend its quarterly dividend as well as its common stock repurchase program. Tidewater said it will save about $47 million in cash on an annualized basis through the plan as well as the $100 million that had been authorized for spending under the buyback.

Despite the headwinds caused by a continuously falling crude market, Tidewater seems to be going through a sort of correction.

TheStreet Ratings currently has a "sell" rating and D+ letter grade on the company. TheStreet identified several concerns investors should have, including disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

For more on Real Money's 20 distressed companies to watch:

Stressed Out: Introducing Real Money's Distressed Index

Stressed Out: Ultra Petroleum Plummets on S&P Downgrade

Stressed Out: The Ebb of Tidewater Will Leave You Stranded

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