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) -- ArcelorMittal (NYSE: MT) has been upgraded by TheStreet Ratings from sell to hold. Among the primary strengths of the company is its generally strong cash flow from operations. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
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- Net operating cash flow has increased to $3,327.00 million or 15.60% when compared to the same quarter last year. Despite an increase in cash flow, ARCELORMITTAL SA's cash flow growth rate is still lower than the industry average growth rate of 33.30%.
- MT, with its decline in revenue, slightly underperformed the industry average of 5.8%. Since the same quarter one year prior, revenues fell by 14.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- ARCELORMITTAL SA 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, ARCELORMITTAL SA swung to a loss, reporting -$2.47 versus $0.86 in the prior year. This year, the market expects an improvement in earnings ($0.68 versus -$2.47).
- The gross profit margin for ARCELORMITTAL SA is currently extremely low, coming in at 2.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -20.64% is significantly below that of the industry average.
- 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 Metals & Mining industry. The net income has significantly decreased by 298.7% when compared to the same quarter one year ago, falling from -$1,000.00 million to -$3,987.00 million.
-- Written by a member of TheStreet Ratings Staff