NEW YORK ( TheStreet) -- SK Telecom (NYSE: SKM) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its attractive valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- SKM, with its decline in revenue, underperformed when compared the industry average of 10.4%. Since the same quarter one year prior, revenues slightly dropped by 0.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- SK TELECOM CO LTD's earnings per share declined by 40.0% in the most recent quarter compared to the same quarter a year ago. 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, SK TELECOM CO LTD increased its bottom line by earning $2.13 versus $1.85 in the prior year. For the next year, the market is expecting a contraction of 16.0% in earnings ($1.79 versus $2.13).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Wireless Telecommunication Services industry. The net income has significantly decreased by 41.1% when compared to the same quarter one year ago, falling from $494.45 million to $291.11 million.
- 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 Wireless Telecommunication Services industry and the overall market, SK TELECOM CO LTD's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff