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) -- Westmoreland Coal (Nasdaq: WLB) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its poor profit margins, unimpressive growth in net income and feeble growth in its earnings per share.
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- The gross profit margin for WESTMORELAND COAL CO is rather low; currently it is at 20.39%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.75% trails that of the industry average.
- The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 32.1% when compared to the same quarter one year ago, falling from -$3.62 million to -$4.79 million.
- WESTMORELAND COAL CO's earnings per share declined by 28.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, WESTMORELAND COAL CO continued to lose money by earning -$0.43 versus -$0.63 in the prior year. For the next year, the market is expecting a contraction of 11.6% in earnings (-$0.48 versus -$0.43).
- Compared to its closing price of one year ago, WLB's share price has jumped by 150.08%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in WLB do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- Net operating cash flow has significantly increased by 50.37% to $22.25 million when compared to the same quarter last year. In addition, WESTMORELAND COAL CO has also vastly surpassed the industry average cash flow growth rate of -23.14%.