NEW YORK (TheStreet) --Shares of Gencorp Inc. (GY - Get Report) are lower by-1.68% to $18.11 in after-hours trading on Wednesday following the company's 2014 second quarter earnings results which showed a net loss of $50.2 million, or -87 cents per share, compared to a net loss of $11.8 million, or -20 cents per share from the same period last year.
However, the company, which manufacturers aerospace and defense products and systems, posted an increase in net sales to $403.1 million for the most recent quarter, compared to $286.6 million from the 2013 second quarter.
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"We rate GENCORP INC (GY) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
TheStreet Ratings team rates GENCORP INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
- Compared to other companies in the Aerospace & Defense industry and the overall market, GENCORP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- The revenue growth greatly exceeded the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 35.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- Net operating cash flow has significantly decreased to -$25.30 million or 466.66% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The debt-to-equity ratio is very high at 14.52 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, GY maintains a poor quick ratio of 0.75, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: GY Ratings Report