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) -- Carbo Ceramics (NYSE: CRR) 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 expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and deteriorating net income.
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- CRR has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.53, which clearly demonstrates the ability to cover short-term cash needs.
- 36.80% is the gross profit margin for CARBO CERAMICS INC which we consider to be strong. Regardless of CRR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CRR's net profit margin of 11.90% compares favorably to the industry average.
- CRR, with its decline in revenue, underperformed when compared the industry average of 7.8%. 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.
- CARBO CERAMICS INC's earnings per share declined by 42.0% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, CARBO CERAMICS INC reported lower earnings of $4.59 versus $5.61 in the prior year. For the next year, the market is expecting a contraction of 29.2% in earnings ($3.25 versus $4.59).
- 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 Energy Equipment & Services industry. The net income has significantly decreased by 42.0% when compared to the same quarter one year ago, falling from $30.29 million to $17.58 million.
-- Written by a member of TheStreet Ratings Staff