NEW YORK ( TheStreet) -- Harsco Corporation (NYSE: HSC) has been upgraded by TheStreet Ratings from sell 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 deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- HSC's revenue growth trails the industry average of 30.1%. Since the same quarter one year prior, revenues slightly increased by 4.7%. 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.
- HSC's debt-to-equity ratio of 0.77 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.00 is sturdy.
- HARSCO 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 two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, HARSCO CORP swung to a loss, reporting -$0.12 versus $0.13 in the prior year. This year, the market expects an improvement in earnings ($1.55 versus -$0.12).
- The gross profit margin for HARSCO CORP is rather low; currently it is at 21.60%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -11.70% is significantly below that of the industry average.
- Net operating cash flow has decreased to $108.67 million or 34.31% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
-- Written by a member of TheStreet RatingsStaff