) -- Here are three timely rating changes from our quantitative equity model, which evaluates stocks' fundamentals and performance.
The model downgraded integrated telecom provider
: Fourth-quarter profit dropped 46% to $155 million, or 49 cents a share, as revenue declined 0.5% to $2.4 billion. The company's net margin halved to 6%. Cash increased by $37 million, but a quick ratio of 0.3 demonstrates poor liquidity. A 0.8 debt-to-equity ratio indicates a balanced capital structure.
: Telus advanced 25% during the past year, trailing major U.S. indices. The shares are cheap relative to those of telecom peers based on trailing earnings, book value, sales and cash flow. Telus garners a financial strength score of 1.5 out of 10, hurting its net grade.
The model downgraded cigarette-maker
: Fourth-quarter net income declined 6.2% to $242 million, but earnings per share fell a more modest 0.7% to $1.52, helped by a smaller float. Revenue increased 2.2% to $932 million. Lorillard's operating margin narrowed from 45% to 43%. Its 8.3 debt-to-equity ratio indicates excessive leverage.
: Lorillard gained 20% over the past year, trailing U.S. benchmarks. The shares are inexpensive compared to those of tobacco peers based on trailing earnings, projected earnings and sales. They're expensive when considering cash flow and book value. The model gives Lorillard a financial strength score of 2 out of 10.
The model upgraded utility
: Fourth-quarter net income rose 4.5% to $346 million, but earnings per share rose 24% to 26 cents. Revenue declined 0.7% to $3.1 billion. Duke's operating margin expanded from 16% to 19%. Its 0.7 debt-to-equity ratio is less than the industry average, reflecting conservative leverage.
: Duke Energy increased 15% over the past year, lagging behind major U.S. indices. The shares are cheap relative to those of utility peers based on projected earnings and book value, but are expensive based on trailing earnings, sales and cash flow.
-- Reported by Jake Lynch in Boston.