Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its notable return on equity, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Electric Utilities industry and the overall market, PPL CORP's return on equity exceeds that of both the industry average and the S&P 500.
- 39.30% is the gross profit margin for PPL CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.80% is above that of the industry average.
- Net operating cash flow has increased to $1,147.00 million or 11.14% when compared to the same quarter last year. In addition, PPL CORP has also modestly surpassed the industry average cash flow growth rate of 5.94%.
- The revenue fell significantly faster than the industry average of 12.9%. Since the same quarter one year prior, revenues fell by 23.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- PPL CORP's earnings per share declined by 19.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PPL CORP increased its bottom line by earning $2.71 versus $2.15 in the prior year. For the next year, the market is expecting a contraction of 13.3% in earnings ($2.35 versus $2.71).
PPL Corporation, an energy and utility holding company, engages in the generation, transmission, distribution, and sale of electricity to wholesale and retail customers in the United States and the United Kingdom. PPL has a market cap of $16.42 billion and is part of the utilities sector and utilities industry. The company has a P/E ratio of 10.1, below the S&P 500 P/E ratio of 17.7. Shares are down 4% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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