NEW YORK ( TheStreet) -- Martin Marietta Materials (NYSE: MLM) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and disappointing return on equity. Highlights from the ratings report include:
- Net operating cash flow has increased to $79.23 million or 17.90% when compared to the same quarter last year. In addition, MARTIN MARIETTA MATERIALS has also vastly surpassed the industry average cash flow growth rate of -51.19%.
- The revenue fell significantly faster than the industry average of 40.1%. Since the same quarter one year prior, revenues slightly dropped by 1.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for MARTIN MARIETTA MATERIALS is rather low; currently it is at 16.60%. It has decreased significantly from the same period last year. Regardless of the weak results of the gross profit margin, the net profit margin of 3.50% is above that of the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Construction Materials industry average. The net income has decreased by 0.0% when compared to the same quarter one year ago, dropping from $14.80 million to $14.80 million.
-- Written by a member of TheStreet Ratings Staff