TSC Ratings' Updates: Texas Instruments

Zenith National Insurance(ZNT Quote) was downgraded to hold from buy. Zenith is a provider of workers' compensation insurance in the U.S. 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.

ZNT's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been successful management of debt levels.

At 36.4%, the gross profit margin for Zenith is strong. Regardless of ZNT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ZNT's net profit margin of 22.4% significantly outperformed the industry.

Regardless of the drop in revenue, the company managed to outperform against the industry average of 23.5%. Since the same quarter one year prior, revenue fell by 20.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

Zenith's earnings per share declined by 35.3% in the most-recent quarter compared with the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, ZNT reported lower earnings of $6.27 vs. $6.96 in the prior year. For the next year, the market is expecting a contraction of 38.6% in earnings ($3.85 vs. $6.27).