NEW YORK (TheStreet) -- United Microelectronics (UMC) shares are down 19.6% to $1.93 in after-hours trading after closing intraday trading up 1.06% on heavy volume Friday after the semiconductor foundry company reported a 23.2% increase in December sales.
The company reported December sales of $381,095,182 in a statement released today, while full year revenue of $4.37 billion that beat Capital IQ consensus estimates of $4.34 billion in revenue for the year.
The six firms that currently cover the stock have an average rating of "hold" with a twelve month price target of $15.
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TheStreet Ratings team rates UNITED MICROELECTRONICS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNITED MICROELECTRONICS CORP (UMC) 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 largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and increase in stock price during the past year. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- UMC's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.49, which illustrates the ability to avoid short-term cash problems.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- 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 Semiconductors & Semiconductor Equipment industry. The net income has decreased by 23.5% when compared to the same quarter one year ago, dropping from $121.39 million to $92.87 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, UNITED MICROELECTRONICS CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: UMC Ratings Report