NEW YORK (TheStreet) -- Shares of ADT (ADT) - Get ADT, Inc. Report are trading higher by 3.05% to $34.82 on heavy volume Wednesday afternoon, after the home and business security company reported better than expected fiscal first quarter earnings results this morning.
The company posted adjusted earnings of 51 cents per share for the quarter, higher than analysts' estimates of 49 cents per share.
Revenue for the fiscal fourth quarter was up 5.7% on a year-over-year basis to $887 million, also topping analysts' forecasts of $883.05 million.
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About 4.62 million shares of ADT traded hands as of 3:20 p.m. ET today, compared to its average trading volume of about 2.21 million shares a day.
Boca Raton, FL-based ADT is a provider of electronic security, interactive home and business automation, and monitoring services for residences and small businesses in the U.S. and Canada.
Separately, TheStreet Ratings team rates ADT CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ADT CORP (ADT) 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 revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.4%. Since the same quarter one year prior, revenues slightly increased by 4.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- ADT CORP's earnings per share improvement from the most recent quarter was slightly positive. 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, ADT CORP reported lower earnings of $1.67 versus $1.88 in the prior year. This year, the market expects an improvement in earnings ($2.05 versus $1.67).
- Currently the debt-to-equity ratio of 1.63 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Along with this, the company manages to maintain a quick ratio of 0.24, which clearly demonstrates the inability to cover short-term cash needs.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Commercial Services & Supplies industry and the overall market, ADT CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: ADT Ratings Report