Pigboy, For a company to have debt these days you may as well have the plague...
CA sinks amid debt review
By August Cole, CBS.MarketWatch.com
Last Update: 12:08 PM ET Feb. 6, 2002
ISLANDIA, N.Y. (CBS.MW) -- Computer Associates fell more than 10 percent on Wednesday despite a reaffirmation of its fourth-quarter financial targets after Moody's said it planned to review the software company's debt rating.
Shares of Islandia, N.Y.-based Computer Associates (CA: news, chart, profile) lost $3.37 to $28.08 with more than 11 million shares changing hands.
The company said it was "surprised and disappointed" with rating agency Moody's Investors Service deciding to review the software company's debt rating. CA is also expected to present at the Goldman Sachs technology conference in La Quinta, Calif., on Wednesday at 2 p.m. Eastern. See Tuesday's coverage.
Moody's placed CA's senior unsecured long-term rating and short term rating on review for possible downgrade. The rating agency said on Wednesday evening the action reflected its expectation that CA's cash-flow generation will remain weakened from historic levels for at least the near term and that competitive rivalry remains formidable amid a weak corporate buying environment for enterprise software.
In response to Moody's action, CA affirmed its outlook of $770 million in revenue for the fourth quarter and an operating loss-per-share of 4 to 5 cents.
As well, the firm iterated that it had strong cash flow and was working to cut down debt.
CA said there has been no material change to its business or financial results, including cash flow generation, since it issued its third-quarter earnings release on Jan. 22 that would have prompted action from Moody's.
On Feb. 4, the company said it had sold $1 billion in senior notes in a private placement to refinance debt and general corporate purposes.
August Cole is spot news editor at CBS.MarketWatch.com in Chicago
So one nice thing about the SAN sphere is the debt free status of all the major players. To those in the know. DO any of the players have any vulnerability here that most may not know about?
Thanks in advance. |
