NEW YORK ( TheStreet) -- Huntsman Corporation (NYSE: HUN) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 13.6%. Since the same quarter one year prior, revenues rose by 23.9%. 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.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Chemicals industry and the overall market, HUNTSMAN CORP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- HUNTSMAN 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. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, HUNTSMAN CORP swung to a loss, reporting -$0.09 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($1.71 versus -$0.09).
- Net operating cash flow has significantly decreased to $24.00 million or 73.91% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- 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 Chemicals industry. The net income has significantly decreased by 161.8% when compared to the same quarter one year ago, falling from $55.00 million to -$34.00 million.