TSC Ratings' Updates: Kraft

Kraft had been rated a hold as of Jan. 25, 2008.

We downgraded Teppco Partners(TPP Quote) to hold from buy. The Houston-based company operates pipelines of refined products and liquefied petroleum 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.

Teppco's very impressive revenue growth greatly exceeded the industry average of 31.9%. Since the same quarter one year prior, revenues jumped by 104.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Tepcco's earnings per share from the most-recent quarter came in slightly below the year-earlier quarter. This company has reported somewhat volatile earnings recently, and we feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, Teppco increased its bottom line by earning $2.59 vs. $1.77 in the prior year. For the next year, the market is expecting a contraction of 24.7% in earnings ($1.95 vs. $2.59).

The change in net income from the same quarter one year ago has greatly exceeded that of the S&P 500 but is less than that of the oil, gas and consumable fuels industry average. The net income has decreased by 0.1% when compared year over year, dropping from $47.76 million to $47.70 million.