NEW YORK (TheStreet) -- Shares of American Science & Engineering Inc. (ASEI) are lower by 9.70% to $50.01 in early afternoon trading on Wednesday, following the company's announcement that it cut its workforce by 10%, and that it's expecting to report a net loss for the fiscal 2015 second quarter.
The company, which develops, manufacturers, markets, and sells X-Ray inspection and other detection products for the purposes of homeland security, did not give specifics regarding how large of a net loss it's expecting for the quarter.
American Science will report its 2015 second quarter results on November 7, and said it anticipates it will feel the benefits of its cost cutting measures, which include reducing its workforce, by the fiscal 2015 third quarter.
"The escalating global volatility negatively impacted our quarterly results with shipment delays for orders already recorded in backlog. While our opportunity pipeline remains robust, we have reduced our expenses to manage through the quarter to quarter variability that has affected us and others in our industry," said company CEO Chuck Dougherty.
Separately, TheStreet Ratings team rates AMERICAN SCIENCE ENGINEERING as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMERICAN SCIENCE ENGINEERING (ASEI) 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 largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- ASEI's debt-to-equity ratio is very low at 0.01 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.18, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for AMERICAN SCIENCE ENGINEERING is rather high; currently it is at 50.04%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 4.09% trails the industry average.
- ASEI, with its decline in revenue, underperformed when compared the industry average of 1.3%. Since the same quarter one year prior, revenues fell by 17.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- AMERICAN SCIENCE ENGINEERING has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, AMERICAN SCIENCE ENGINEERING reported lower earnings of $1.92 versus $2.05 in the prior year. For the next year, the market is expecting a contraction of 19.3% in earnings ($1.55 versus $1.92).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Aerospace & Defense industry. The net income has significantly decreased by 70.1% when compared to the same quarter one year ago, falling from $4.87 million to $1.45 million.
- You can view the full analysis from the report here: ASEI Ratings Report