NEW YORK (TheStreet) -- EMC (EMC) shares are declining by 0.20% to $24.93 on Tuesday afternoon, one day ahead of the company's second quarter 2015 earnings results, due out before the opening bell tomorrow.
Analysts are expecting a year-over-year decrease in earnings and an increase in revenue for the most recent quarter.
For the latest quarter, the company is expected to post earnings of 41 cents per share on revenue of $6.1 billion, according to analysts polled by Thomson Reuters.
In the same quarter last year, the company reported earnings of 43 cents per share on revenue of $5.88 billion.
Additionally, the company recently announced that it has completed its $1.2 billion acquisition of cloud software vendor Virtustream. Virtustream business is now EMC's managed-cloud services division, Bloomberg reported.
EMC develops, delivers, and supports information infrastructure and virtual infrastructure technologies, solutions, and services.
Separately, TheStreet Ratings team rates EMC CORP/MA as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate EMC CORP/MA (EMC) 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, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth significantly trails the industry average of 32.7%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Although EMC's debt-to-equity ratio of 0.27 is very low, it is currently higher than that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
- The gross profit margin for EMC CORP/MA is rather high; currently it is at 67.22%. Regardless of EMC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EMC's net profit margin of 4.48% is significantly lower than the industry average.
- Net operating cash flow has decreased to $1,080.00 million or 19.28% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The share price of EMC CORP/MA has not done very well: it is down 6.67% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: EMC Ratings Report