NEW YORK (TheStreet) -- Shares of Tecumseh Products Co. (TECU - Get Report) are down -4.41% to $5.84 on Monday after the company reported a net loss and a decrease in revenue for the 2014 first quarter.
The company, which manufactures hermetically sealed compressors for residential and specialty air conditioning and other household and commercial appliances, announced a net loss of -$11.1 million, or 60 cents per share, compared to a net loss of -$8.4 million, or 45 cents per share from the year ago quarter.
TheStreet Ratings team rates TECUMSEH PRODUCTS CO as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate TECUMSEH PRODUCTS CO (TECU) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TECUMSEH PRODUCTS CO has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, TECUMSEH PRODUCTS CO swung to a loss, reporting -$1.86 versus $1.25 in the prior year.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Machinery industry. The net income has significantly decreased by 62.9% when compared to the same quarter one year ago, falling from -$10.50 million to -$17.10 million.
- 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 Machinery industry and the overall market, TECUMSEH PRODUCTS CO's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for TECUMSEH PRODUCTS CO is currently extremely low, coming in at 10.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -8.81% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 29.10%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 55.55% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full analysis from the report here: TECU Ratings Report