TSC Ratings' Updates: Gannett

The decline in net income contributed to the steep decline in earnings per share in the most-recent quarter in comparison with its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, Hilltop turned its bottom line around by earning 7 cents a share vs. a loss of 54 cents a share in the prior year. Wall Street expects earnings to contract in its upcoming fiscal year by 42.9% to 4 cents a share.

The share price of Hilltop Holdings is down 6.47% when compared with where it was trading one year earlier. This reflects both the trend in the overall market as well as the sharp decline in the company's earnings per share. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time. Hilltop Holdings had been rated a hold since Nov. 11, 2007.

Pharmanet Development(PDGI Quote), which provides clinical drug development services to pharmaceutical, biotechnology, generic drug and medical device companies worldwide, was upgraded to 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 revenue growth, compelling growth in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a decline in the stock price during the past year, disappointing return on equity and poor profit margins.