USG reported earnings per share of 19 cents, excluding non-recurring items, which beat the consensus estimate of 10 cents. Revenues also increased 12% year over year to $915 million, which beat the consensus estimate of $906.7 million.
Chairman, President and CEO James Metcalf noted in the report that USG has now posted four consecutive quarters of positive operating results.
TheStreet Ratings team rates USG CORP as a "hold" with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate USG CORP (USG) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- USG's revenue growth has slightly outpaced the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 11.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- USG CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, USG CORP continued to lose money by earning -$1.71 versus -$3.78 in the prior year. This year, the market expects an improvement in earnings ($0.56 versus -$1.71).
- Net operating cash flow has increased to $56.00 million or 16.66% when compared to the same quarter last year. Despite an increase in cash flow, USG CORP's cash flow growth rate is still lower than the industry average growth rate of 34.19%.
- The gross profit margin for USG CORP is rather low; currently it is at 20.86%. Regardless of USG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.48% trails the industry average.
- The debt-to-equity ratio is very high at 50.33 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, USG has managed to keep a strong quick ratio of 1.59, which demonstrates the ability to cover short-term cash needs.
- You can view the full analysis from the report here: USG Ratings Report