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) -- United Continental Holdings (NYSE: UAL) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, disappointing return on equity and poor profit margins.
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- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Airlines industry average. The net income increased by 6.9% when compared to the same quarter one year prior, going from -$448.00 million to -$417.00 million.
- UAL's revenue growth trails the industry average of 11.4%. Since the same quarter one year prior, revenues slightly increased by 1.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- UNITED CONTINENTAL HLDGS INC has improved earnings per share by 7.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, UNITED CONTINENTAL HLDGS INC swung to a loss, reporting -$2.32 versus $2.01 in the prior year. This year, the market expects an improvement in earnings ($3.58 versus -$2.32).
- The debt-to-equity ratio is very high at 129.22 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, UAL has a quick ratio of 0.55, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- 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 Airlines industry and the overall market, UNITED CONTINENTAL HLDGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
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