Fitch raises Alcatel outlook

Fitch Ratings raised its outlook on Alcatel to stable from negative. Fitch rates Alcatel's senior unsecured debt at BB-.

The change in outlook follows Alcatel's announcement of solid third quarter results and reflects the progress the company continues to make in cost restructuring, liquidity and cash flow management, Fitch said.

Fitch added that Alcatel's results confirm its view that the risk of financial difficulties materializing and downward migration in the company's rating has reduced substantially.

In the third quarter the company reported income from operations of €160 million, a significant improvement on a loss of €227 million a year ago, on sales of €3.0 billion, down 3% from the previous quarter and 13% year on year.

Cashflow and liquidity continue to be managed well, with cash tied up in working capital reduced to less than €1.0 billion from a high of €10.3 billion, Fitch noted. Alcatel reported positive net cash of around €0.5 billion, a turnaround from net debt of €5.5 billion in the third quarter of 2001.

While Fitch remains unconvinced that market conditions have stabilised, any revenue decline in 2004 should be limited.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.