Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- Eagle Rock Energy Partners (Nasdaq: EROC) has been downgraded by TheStreet Ratings from buy to hold. The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. 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.
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- EROC, with its very weak revenue results, has greatly underperformed against the industry average of 1.8%. Since the same quarter one year prior, revenues plummeted by 55.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- EAGLE ROCK ENERGY PARTNRS LP 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 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, EAGLE ROCK ENERGY PARTNRS LP turned its bottom line around by earning $0.38 versus -$0.22 in the prior year. For the next year, the market is expecting a contraction of 57.9% in earnings ($0.16 versus $0.38).
- EROC's debt-to-equity ratio of 0.92 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. Despite the fact that EROC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.58 is low and demonstrates weak liquidity.
- 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. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EAGLE ROCK ENERGY PARTNRS LP's return on equity significantly trails that of both the industry average and the S&P 500.
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 209.8% when compared to the same quarter one year ago, falling from $97.37 million to -$106.90 million.
-- Written by a member of TheStreet Ratings Staff