NEW YORK ( TheStreet) -- Semiconductor Manufacturing International C (NYSE: SMI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, poor profit margins, generally weak debt management and feeble growth in its earnings per share. 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 when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 103.9% when compared to the same quarter one year ago, falling from $96.04 million to -$3.77 million.
- The gross profit margin for SEMICONDUCTOR MFG INTL CORP is currently extremely low, coming in at 14.30%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -1.10% is significantly below that of the industry average.
- Despite currently having a low debt-to-equity ratio of 0.50, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that SMI's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.53 is low and demonstrates weak liquidity.
- SEMICONDUCTOR MFG INTL CORP 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, SEMICONDUCTOR MFG INTL CORP continued to lose money by earning -$0.02 versus -$2.16 in the prior year. For the next year, the market is expecting a contraction of 895.0% in earnings (-$0.20 versus -$0.02).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, SEMICONDUCTOR MFG INTL CORP's return on equity significantly trails that of both the industry average and the S&P 500.