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) -- Kronos Worldwide (NYSE: KRO) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and poor profit margins.
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- The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, KRO has a quick ratio of 1.74, which demonstrates the ability of the company to cover short-term liquidity needs.
- KRO, with its decline in revenue, underperformed when compared the industry average of 4.1%. Since the same quarter one year prior, revenues slightly dropped by 9.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The gross profit margin for KRONOS WORLDWIDE INC is rather low; currently it is at 15.60%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -4.56% is significantly below that of the industry average.
- Net operating cash flow has significantly decreased to $19.40 million or 62.83% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff