NEW YORK ( TheStreet) -- Otelco Inc. Income Deposit Secs Units Cons (Nasdaq: OTT) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and generally disappointing historical performance in the stock itself.
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- 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 Diversified Telecommunication Services industry. The net income has significantly decreased by 10077.4% when compared to the same quarter one year ago, falling from $1.28 million to -$128.01 million.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 70.07%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 9780.00% compared to the year-earlier quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- OTELCO INC 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. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, OTELCO INC increased its bottom line by earning $0.17 versus $0.04 in the prior year.
- OTT, with its decline in revenue, slightly underperformed the industry average of 1.8%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for OTELCO INC is rather high; currently it is at 56.90%. Regardless of OTT's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, OTT's net profit margin of -518.00% significantly underperformed when compared to the industry average.
-- Written by a member of TheStreet Ratings Staff