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NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
- LIFE TECHNOLOGIES CORP has improved earnings per share by 7.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, LIFE TECHNOLOGIES CORP increased its bottom line by earning $2.39 versus $2.05 in the prior year. This year, the market expects an improvement in earnings ($4.18 versus $2.39).
- The current debt-to-equity ratio, 0.46, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.03, which illustrates the ability to avoid short-term cash problems.
- LIFE, with its decline in revenue, underperformed when compared the industry average of 9.6%. Since the same quarter one year prior, revenues slightly dropped by 0.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Net operating cash flow has decreased to $219.25 million or 14.37% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- 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 Life Sciences Tools & Services industry and the overall market, LIFE TECHNOLOGIES CORP's return on equity is below that of both the industry average and the S&P 500.
Life Technologies Corporation operates as a life sciences company. Life has a market cap of $12.93 billion and is part of the health care sector and health services industry. Shares are up 52.7% year to date as of the close of trading on Monday.
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