TSC Ratings' Updates: Hawaiian Electric Industries

UA had been rated a sell since April 30, 2008.

Commercial Metals(CMC) has been downgraded from buy to hold. Commercial Metals Company engages in the manufacture, recycle, market, and distribution of steel and metal products and related materials and services in the U.S. and internationally. Our recommendation is supported by the company's strong revenue growth and lower leverage level. These positives are further strengthened by strategic acquisitions and a positive outlook provided by the management. However, integration related challenges, deteriorating margins, and returns are the potential downside risks to the buy rating.

Commercial Metals' third quarter revenue increased 29.7% to $2.91 billion from $2.24 billion, driven by an impressive revenue growth across its segments. Revenue from the Americas Recycling, Americas Mills and Americas Fab and Distribution grew 20.7%, 19.7%, and 15.6%, respectively. Meanwhile, International Mills and International Fab and Distribution sales rose 49.0% and 52.6%, respectively. Total mills and fabrication shipments rose 2.3% and 14.4% to 1.01 million tons and 452,000 tons, respectively.

Although the company's debt-to-equity ratio increased to 0.62 from 0.48, it is currently operating at a lower leverage level, implying the successful management of debt levels.

During the quarter under review, CMC completed the acquisition of all the operating assets of ABC Coating Company of Texas Inc. of Waxahachie, Texas; ABC Coating Co., Inc. of Brighton, Colorado; Banner Rebar Inc. of Denver, Colorado; and Toltec Steel Services Inc. of Kankakee, Illinois, which is expected to drive its revenue in the upcoming quarters.