TSC Ratings' Updates: Hawaiian Electric Industries

The company forecasts its fourth quarter earnings per share to be in the range of 90 cents to $1.00. Additionally, the company expects that all its segments will continue to grow except americas fabrication and distribution segment, which may experience additional margin pressure due to rising steel prices.

Despite strong revenue growth, the company's margins and net income deteriorated significantly during the quarter. Additionally, both return on asset and equity narrowed 499 and 936 basis points. Furthermore, any failure of the company to successfully integrate recent acquisitions may negatively impact its financial position in the upcoming quarters.

CMC had been rated a buy since September 29, 2006.

Salesforce.com (CRM Quote) has been downgraded from buy to hold. Salesforce.com provides on-demand customer relationship management (CRM) services to businesses and industries worldwide. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we also find weaknesses including premium valuation and a decline in the stock price during the past year.

The revenue growth greatly exceeded the industry average of 15.6%. Since the same quarter one year prior, revenue rose by 49.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

CRM has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.21, which illustrates the ability to avoid short-term cash problems.