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) -- McClatchy Company (NYSE: MNI) 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 feeble growth in its earnings per share.
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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 Media industry. The net income has significantly decreased by 171.4% when compared to the same quarter one year ago, falling from $42.01 million to -$30.02 million.
- MCCLATCHY CO 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. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MCCLATCHY CO reported lower earnings of $0.00 versus $0.64 in the prior year. This year, the market expects an increase in earnings to $0.64 from $0.00.
- The gross profit margin for MCCLATCHY CO is rather high; currently it is at 57.30%. Regardless of MNI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MNI's net profit margin of -8.43% significantly underperformed when compared to the industry average.
- MNI's revenue growth trails the industry average of 13.9%. Since the same quarter one year prior, revenues slightly increased by 1.2%. 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.
- Compared to its price level of one year ago, MNI is up 1.10% to its most recent closing price of 2.75. Looking ahead, however, our view is that this stock's fundamentals could hold back its rise or even push it down.
-- Written by a member of TheStreet Ratings Staff