Aixtron AG ( AIXG), which manufactures and sells deposition equipment to the semiconductor industry, was downgraded to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive. Aixtron has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems. Net operating cash flow has significantly improved to $40.07 million, an increase of 2125.88% when compared with the same quarter last year. However, the company has experienced a steep decline in earnings per share in the most recent quarter in comparison with its performance from the same quarter a year ago. As a result, earnings have become quite volatile, making it difficult to predict. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, the company increased its bottom line by earning $0.28 versus $0.10 in the prior year. This year, the market expects earnings to improve to $0.40. Its current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. However, when compared with other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, Aixtron's return on equity is below that of both the industry average and the S&P 500. Its growth in net income from the same quarter one year ago also underperformed the S&P 500 and greatly underperformed the Semiconductors & Semiconductor Equipment industry average. Net income in its recent quarterly report fell to $4.13 million from $10.78 million, decreasing significantly by 61.7%. Aixtron had been rated a buy since April 16, 2007.