NEW YORK (TheStreet) -- Owens-Illinois (NYSE:OI) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including generally poor debt management, disappointing return on equity and weak operating cash flow. Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Containers & Packaging industry. The net income increased by 47.6% when compared to the same quarter one year prior, rising from $82.00 million to $121.00 million.
- OI's revenue growth trails the industry average of 26.6%. Since the same quarter one year prior, revenues slightly increased by 1.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- OWENS-ILLINOIS INC has improved earnings per share by 46.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, OWENS-ILLINOIS INC swung to a loss, reporting -$3.07 versus $1.53 in the prior year. This year, the market expects an improvement in earnings ($2.90 versus -$3.07).
- The debt-to-equity ratio is very high at 3.65 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, OI maintains a poor quick ratio of 0.71, which illustrates the inability to avoid short-term cash problems.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Containers & Packaging industry and the overall market, OWENS-ILLINOIS INC's return on equity significantly trails that of both the industry average and the S&P 500.
-- Written by a member of TheStreet RatingsStaff
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