NEW YORK (TheStreet) -- Shares of Comverse Inc (CNSI) closed Friday's regular trading session up 1.27% to $24.01, ahead of the company's first quarter earnings report, scheduled to be released before the market opens on Monday, June 15.
For the first quarter, Comverse is expected to post a loss of 18 cents per share on revenue of $108 million, according to analysts polled by Thomson Reuters.
In the same quarter of last year, the company posted a loss of 72 cents per share on revenue of $119 million.
Wakefield, Mass.-based Comverse is a global provider of cloud-based and in-network services enablement and monetization software solutions for communication service providers and enterprises.
The company offers a suite of software solutions designed to support users' connected lifestyles, and operates through the business support systems and digital services segments.
Separately, TheStreet Ratings team rates COMVERSE INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate COMVERSE INC (CNSI) 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 expanding profit margins, largely solid financial position with reasonable debt levels by most measures 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:
- 41.35% is the gross profit margin for COMVERSE INC which we consider to be strong. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CNSI's net profit margin of 8.27% significantly trails the industry average.
- CNSI's debt-to-equity ratio is very low at 0.08 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
- CNSI, with its decline in revenue, underperformed when compared the industry average of 5.0%. Since the same quarter one year prior, revenues fell by 28.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Software industry and the overall market, COMVERSE INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$4.16 million or 134.65% 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: CNSI Ratings Report