Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. NEW YORK ( TheStreet) -- Jabil Circuit (NYSE: JBL) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, increase in net income and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and generally higher debt management risk.
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- The net income growth from the same quarter one year ago has exceeded that of the Electronic Equipment, Instruments & Components industry average, but is less than that of the S&P 500. The net income increased by 11.4% when compared to the same quarter one year prior, going from $105.85 million to $117.92 million.
- JBL, with its decline in revenue, slightly underperformed the industry average of 0.7%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- JBL's debt-to-equity ratio of 0.75 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.48 is very low and demonstrates very weak liquidity.
- Net operating cash flow has decreased to $117.71 million or 22.51% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, JABIL CIRCUIT INC has marginally lower results.