SunCoke Energy Inc Stock Downgraded (SXC)

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) -- SunCoke Energy (NYSE: SXC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and generally higher debt management risk.

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Highlights from the ratings report include:
  • Net operating cash flow has significantly increased by 84.26% to -$1.40 million when compared to the same quarter last year. In addition, SUNCOKE ENERGY INC has also vastly surpassed the industry average cash flow growth rate of -4.89%.
  • SXC, with its decline in revenue, underperformed when compared the industry average of 4.3%. Since the same quarter one year prior, revenues fell by 18.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for SUNCOKE ENERGY INC is rather low; currently it is at 18.90%. Regardless of SXC's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SXC's net profit margin of 1.58% is significantly lower than the industry average.
  • 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 Metals & Mining industry. The net income has significantly decreased by 80.4% when compared to the same quarter one year ago, falling from $31.60 million to $6.20 million.

SunCoke Energy, Inc. engages in mining and producing coke in the Americas. It offers metallurgical and thermal coal for steel making processes. The company was incorporated in 2010 and is headquartered in Lisle, Illinois. As of July 21, 2011, SunCoke Energy, Inc. The company has a P/E ratio of 36.3, above the S&P 500 P/E ratio of 17.7. SunCoke Energy has a market cap of $1.49 billion and is part of the basic materials sector and metals & mining industry. Shares are down 6.3% year to date as of the close of trading on Thursday.

You can view the full SunCoke Energy Ratings Report or get investment ideas from our investment research center.

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