NEW YORK ( TheStreet) -- Owens Corning Incorporated (NYSE: OC) 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 largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.

Highlights from the ratings report include:
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Building Products industry. The net income has significantly decreased by 91.7% when compared to the same quarter one year ago, falling from $937.00 million to $78.00 million.
  • In its most recent trading session, OC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • OWENS CORNING 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. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, OWENS CORNING increased its bottom line by earning $7.28 versus $0.49 in the prior year. For the next year, the market is expecting a contraction of 69.1% in earnings ($2.25 versus $7.28).
  • The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.74 is somewhat weak and could be cause for future problems.
  • OC's revenue growth has slightly outpaced the industry average of 4.1%. Since the same quarter one year prior, revenues slightly increased by 5.3%. 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.

Owens Corning, through its subsidiaries, provides composite and building materials systems worldwide. It operates in two segments, Composites and Building Materials. The company has a P/E ratio of 63.8, below the average materials & construction industry P/E ratio of 65.2 and above the S&P 500 P/E ratio of 17.7. Owens Corning has a market cap of $3.6 billion and is part of the industrial goods sector and materials & construction industry. Shares are down 8.7% year to date as of the close of trading on Monday.

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

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