NEW YORK ( TheStreet) -- Boardwalk Pipeline Partners (NYSE: BWP) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.

Highlights from the ratings report include:
  • The share price of BOARDWALK PIPELINE PRTNRS-LP has not done very well: it is down 7.31% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 72.0% when compared to the same quarter one year ago, falling from $54.40 million to $15.20 million.
  • The gross profit margin for BOARDWALK PIPELINE PRTNRS-LP is rather high; currently it is at 53.40%. Regardless of BWP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.80% trails the industry average.
  • BOARDWALK PIPELINE PRTNRS-LP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. 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, BOARDWALK PIPELINE PRTNRS-LP increased its bottom line by earning $1.48 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $1.48).
  • The revenue growth significantly trails the industry average of 44.0%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

Boardwalk Pipeline Partners, LP, through its subsidiaries, engages in the interstate transportation and storage of natural gas in the United States. The company has a P/E ratio of 19.9, equal to the average energy industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Boardwalk Pipeline has a market cap of $4.8 billion and is part of the basic materials sector and energy industry. Shares are down 8.4% year to date as of the close of trading on Tuesday.

You can view the full Boardwalk Pipeline Ratings Report or get investment ideas from our investment research center.
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