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.