NEW YORK ( TheStreet) -- Great Lakes Dredge & Dock Corporation (Nasdaq: GLDD) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- GLDD, with its decline in revenue, slightly underperformed the industry average of 8.0%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- GLDD's debt-to-equity ratio of 0.87 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.
- GREAT LAKES DREDGE & DOCK CP's earnings per share declined by 50.0% in the most recent quarter compared to 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, GREAT LAKES DREDGE & DOCK CP reported lower earnings of $0.28 versus $0.58 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus $0.28).
- 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. When compared to other companies in the Construction & Engineering industry and the overall market, GREAT LAKES DREDGE & DOCK CP's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for GREAT LAKES DREDGE & DOCK CP is rather low; currently it is at 17.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 0.70% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff