TSC Ratings' Updates: Citigroup

Revenue increased slightly since the same quarter last year, by 4.5%, trailing the industry average of 25.7%, but EPS declined. The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying successful management of debt levels. The company also maintains a quick ratio of 4.37, which clearly demonstrates the ability to cover short-term cash needs.

Net income has significantly decreased by 31.7% when compared with the same quarter one year ago, falling from $35.59 million to $24.31 million, underperforming the energy equipment and services industry but outperforming the S&P 500. Net operating cash flow has decreased to $23.14 million or 48.99% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.

Share price is not only higher than what it was a year ago, but it has also outperformed the S&P 500 over the same period, despite the company's weak earnings results. Nevertheless, there is currently no conclusive evidence that warrants the purchase or sale of this stock.

We've downgraded PPG Industries(PPG Quote), which manufactures coatings, glass and chemical products, from buy to hold. Strengths include its robust revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a decline in the stock price during the past year.

Revenue rose by 37.5% since the same quarter one year prior, outpacing the industry average growth rate of 25.5%. EPS, however, declined. Net operating cash flow has increased to $451.00 million, or 41.82% when compared with the same quarter last year, exceeding the industry average cash flow growth rate of 16.04%. PPG's gross profit margin of 36.1% is strong, thought it has decreased from the same period last year. Its net profit margin of 2.8% is significantly lower than the same period one year prior.