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The numbers: Second-quarter net income dropped 31% to $9.4 million and earnings per share declined 15% to 41 cents as revenue fell 22% to $69 million. The operating margin rose from 20% to 21%, but the net margin decreased from 15% to 14%. Carbo Ceramics has an ideal financial position with $92 million of cash, amounting to a high quick ratio of 6.2, and zero debt.
The stock: Carbo Ceramics has advanced 15% in 2009, more than the Dow Jones Industrial Average or S&P 500 Index. The stock trades at an attractive price-to-earnings ratio of 15 and offers a lackluster 1.8% dividend yield.The model upgraded First Bancorp (FBNC) to "buy." The numbers: Second-quarter revenue fell 5% to $40 million, but net income surged 582% to $36 million and earnings per share rocketed 556% to $2.10. The operating margin rose from 29% to 31% and the net margin jumped from 12% to 89%, boosted by a one-time gain related to the Cooperative Bank acquisition. The stock: First Bancorp is flat in 2009, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 15, indicating a discount to peers and the market, and offers a 1.7% dividend yield, less than the average of S&P 500 companies. The model initiated coverage of machinery maker John Bean Technologies (JBT) at "sell." The numbers: Second-quarter net income decreased 25% to $9.7 million, or 34 cents a share, as revenue declined 17% to $230 million. The operating margin hovered above 7% and the net margin fell from 5% to 4%. The company has a less-than-ideal liquidity position, evident in its quick ratio of 0.6. And a debt-to-equity ratio over 10 indicates excessive leverage.
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