S&P ups Lucent Technologies Inc to B from B-
biz.yahoo.com
Reuters
S&P ups Lucent Technologies Inc to B from B-
Wednesday March 10, 8:54 am ET
(The following statement was released by the ratings agency).
LONDON, March 10 - Standard & Poor's Ratings Services said today that it raised its corporate credit rating on Murray Hill, N.J.-based Lucent Technologies Inc. (NYSE:LU - News) to 'B/Positive/--' from 'B-/Negative/--'.
The action follows a Standard & Poor's review of the telecom equipment industry, as well as a review of Lucent's recent and anticipated performance. (See separate industry commentary entitled "Early Stages of Recovery Seen in Telecom Equipment Industry," dated March 10, 2004.)
"Standard & Poor's believes industry revenues have stabilized in recent quarters, after declining steeply from their peak in 1999, while Lucent's cost reduction actions have enabled a return to moderate profitability in the past few quarters," said Standard & Poor's credit analyst Bruce Hyman.
The ratings on Lucent reflect its high leverage, a dramatically smaller and more aggressive industry because of a substantial shift in service providers' buying patterns, and ongoing major changes in the industry's technology direction. These factors are only partly offset by Lucent's continued major role in that industry, its sufficient operational liquidity, and an appropriate expense structure for current business conditions after substantial restructurings. Lucent's sales of $8.5 billion in the fiscal year ended September 2003 were 22% of the fiscal 1999 peak, and growth from current levels likely will be muted. Following substantial downsizing, including a 70% staff reduction, the company recently returned to adequate levels of operating profitability, while free cash flows, although still negative, have abated. Still, the industry's decline appears to have been stemmed, and there are indications of modest near-term growth. Lucent's liquidity--$4.3 billion at Dec. 31, 2003--is sufficient to fund the company's operations over the intermediate term. |
