NEW YORK ( TheStreet) -- United States Steel Corporation (NYSE: X) 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, good cash flow from operations and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and poor profit margins. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 10.8%. Since the same quarter one year prior, revenues slightly increased by 6.3%. 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.
- Net operating cash flow has significantly increased by 2405.88% to $426.00 million when compared to the same quarter last year. In addition, UNITED STATES STEEL CORP has also vastly surpassed the industry average cash flow growth rate of -50.22%.
- UNITED STATES STEEL 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. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNITED STATES STEEL CORP continued to lose money by earning -$0.59 versus -$3.36 in the prior year. This year, the market expects an improvement in earnings ($2.31 versus -$0.59).
- 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 Metals & Mining industry. The net income has significantly decreased by 154.7% when compared to the same quarter one year ago, falling from -$86.00 million to -$219.00 million.
- The debt-to-equity ratio of 1.19 is relatively high when compared with the industry average, suggesting a need for better debt level management. Along with the unfavorable debt-to-equity ratio, X maintains a poor quick ratio of 0.87, which illustrates the inability to avoid short-term cash problems.
-- Written by a member of TheStreet RatingsStaff