Each weekday, TheStreet.com Ratings updates its ratings on the stocks it covers. The proprietary ratings model projects a stock's total return potential over a 12-month period, including both price appreciation and dividends. Buy, hold or sell ratings designate how the Ratings group expects these stocks to perform against a general benchmark of the equities market and interest rates.
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Direct marketing company Harte-Hanks (HHS - Get Report) has been downgraded to a hold. While the company has a largely solid financial position with reasonable debt levels and notable return on equity, it is also struggling with deteriorating net income, poor profit margins and weak operating cash flow. Harte-Hanks recently reported disappointing second-quarter results, earning $22.9 million, or 31 cents a share, on revenue of $290.1 million. Analysts had expected earnings of 33 cents a share on revenue of $296.8 million. A year earlier, the company earned $30.2 million, or 37 cents a share, on revenue of $298.4 million. Harte-Hanks' gross profit margin is currently lower than what is desirable, coming in at 26.20% and down from a year ago. Its net profit margin of 7.90% trails that of the industry average. Harte-Hanks had been rated a buy since September 2005.