NEW YORK ( TheStreet) -- Buckeye Partners L.P (NYSE: BPL) 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, deteriorating net income and disappointing return on equity. Highlights from the ratings report include:
- BPL's revenue growth trails the industry average of 12.0%. Since the same quarter one year prior, revenues slightly increased by 0.6%. 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 increased to $181.60 million or 16.12% when compared to the same quarter last year. In addition, BUCKEYE PARTNERS LP has also modestly surpassed the industry average cash flow growth rate of 12.26%.
- BUCKEYE PARTNERS LP's earnings per share declined by 31.6% 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, BUCKEYE PARTNERS LP reported lower earnings of $1.25 versus $1.93 in the prior year. This year, the market expects an improvement in earnings ($2.83 versus $1.25).
- 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 greatly underperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 21.9% when compared to the same quarter one year ago, dropping from $66.49 million to $51.96 million.
- The share price of BUCKEYE PARTNERS LP has not done very well: it is down 19.28% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
-- Written by a member of TheStreet Ratings Staff