NEW YORK ( TheStreet) -- Gencor Industries (Nasdaq: GENC) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and poor profit margins. Highlights from the ratings report include:
- GENCOR INDUSTRIES INC 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 suffered a declining pattern earnings per share over the past two years. During the past fiscal year, GENCOR INDUSTRIES INC reported lower earnings of $0.03 versus $0.32 in the prior year.
- 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 Machinery industry. The net income has significantly decreased by 313.3% when compared to the same quarter one year ago, falling from $2.07 million to -$4.42 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Machinery industry and the overall market, GENCOR INDUSTRIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$0.21 million or 123.08% 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 gross profit margin for GENCOR INDUSTRIES INC is currently extremely low, coming in at 14.40%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, GENC's net profit margin of -36.40% significantly underperformed when compared to the industry average.