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) -- Peabody Energy Corporation (NYSE: BTU) has been reiterated by TheStreet Ratings as a hold with a ratings score of C . 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 poor profit margins.
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- BTU, with its decline in revenue, slightly underperformed the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 9.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- PEABODY ENERGY CORP 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, PEABODY ENERGY CORP swung to a loss, reporting -$1.85 versus $3.76 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus -$1.85).
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 39.10%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 505.43% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The gross profit margin for PEABODY ENERGY CORP is rather low; currently it is at 23.50%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -49.87% is significantly below that of the industry average.
- Net operating cash flow has decreased to $223.60 million or 49.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
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