NEW YORK ( TheStreet) -- McClatchy Company (NYSE: MNI) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself. Highlights from the ratings report include:
- 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 the Media industry average. The net income has decreased by 6.4% when compared to the same quarter one year ago, dropping from -$1.96 million to -$2.09 million.
- MNI has underperformed the S&P 500 Index, declining 22.26% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- MCCLATCHY CO reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, MCCLATCHY CO increased its bottom line by earning $0.64 versus $0.39 in the prior year. For the next year, the market is expecting a contraction of 26.6% in earnings ($0.47 versus $0.64).
- MNI, with its decline in revenue, underperformed when compared the industry average of 19.4%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- 49.40% is the gross profit margin for MCCLATCHY CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.70% is in-line with the industry average.
-- Written by a member of TheStreet Ratings Staff