XEROX STOCKS DOWNGRADED TO JUNK STATUS

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XEROX STOCKS DOWNGRADED TO JUNK STATUS

 user 2010-02-22 at 10:31:27 am Views: 45
  • #23471

    http://online.wsj.com/article/BT-CO-20100208-715624.html?mod=WSJ_latestheadlines
    XEROX STOCKS DOWNGRADED TO JUNK STATUS
    S&P Downgrades Xerox To Brink Of Junk On Acquisition
     Standard & Poor’s Ratings Services downgraded its ratings on Xerox Corp. (XRX) to the brink of junk territory after the company closed its $5.6 billion acquisition of Affiliated Computer Services Inc. last week.The deal increased Xerox’s debt-to-earnings ratio, although the ratings agency considers the acquisition “an enhancement to Xerox’s existing business profile.”Credit analyst Lucy Patricola noted Xerox’s “business is vulnerable to macroeconomic conditions, as demonstrated by the sharp drop in equipment sales in 2009.”

    S&P lowered its ratings to BBB-, one step above junk status, and removed them from watch for possible downgrade, where they were placed in September. The outlook is stable.Last month, Xerox, which helps clients copy, print and manage documents, reported $180 million in profit for the fourth quarter, up from just $1 million a year earlier. But the improvement was driven entirely by Xerox’s success in paring its costs.Its shares slid 1 cent to $8.44 in after-hours trading. The stock is up 20% in the past year.