NEW YORK ( TheStreet) -- Loral Space & Communications (Nasdaq: LORL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income. Highlights from the ratings report include:
- LORL's revenue growth trails the industry average of 20.4%. Since the same quarter one year prior, revenues slightly increased by 2.4%. 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 1616.22% to $381.48 million when compared to the same quarter last year. In addition, LORAL SPACE & COMMUNICATIONS has also vastly surpassed the industry average cash flow growth rate of 9.35%.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Communications Equipment industry and the overall market, LORAL SPACE & COMMUNICATIONS's return on equity is below that of both the industry average and the S&P 500.
- LORAL SPACE & COMMUNICATIONS 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. During the past fiscal year, LORAL SPACE & COMMUNICATIONS reported lower earnings of $3.77 versus $15.47 in the prior year.
- 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 Communications Equipment industry. The net income has significantly decreased by 88.7% when compared to the same quarter one year ago, falling from $67.82 million to $7.63 million.
-- Written by a member of TheStreet Ratings Staff