NEW YORK (TheStreet) -- Shares of Houston Wire & Cable (HWCC) are up by 6.47% to $12.50 after announcing record 2014 first quarter sales of $100.3 million, from $94.3 million for the corresponding quarter in 2013.
The company, which provides wire and cable and related services to the U.S. market, reported net income for the most recent quarter declined to $3.7 million, from $3.8 million for the 2013 first quarter.
Earnings per share were 21 cents for the 2014 first quarter versus 22 cents from the same period last year.
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TheStreet Ratings team rates HOUSTON WIRE & CABLE CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HOUSTON WIRE & CABLE CO (HWCC) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.43, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, HWCC has a quick ratio of 1.64, which demonstrates the ability of the company to cover short-term liquidity needs.
- HOUSTON WIRE & CABLE CO's earnings per share declined by 28.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, HOUSTON WIRE & CABLE CO reported lower earnings of $0.45 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($0.86 versus $0.45).
- HWCC, with its decline in revenue, underperformed when compared the industry average of 2.0%. Since the same quarter one year prior, revenues slightly dropped by 9.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for HOUSTON WIRE & CABLE CO is rather low; currently it is at 21.85%. Regardless of HWCC'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 3.33% trails the industry average.
- Net operating cash flow has significantly decreased to $1.17 million or 86.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: HWCC Ratings Report