Xerox Completes Slide to Junk Status
NEW YORK (Reuters) - Embattled office equipment maker Xerox Corp.(NYSE:XRX - news), whose name became synonymous with photocopiers, watched its credit ratings complete their slide to ``junk'' status on Tuesday, being downgraded by Standard & Poor's after reporting its fifth straight quarterly loss.
S&P cut its rating of senior unsecured debt issued by the Stamford, Connecticut-based imaging industry icon two notches to ``BB,'' its second highest junk grade, from ``BBB-minus,'' and its short-term debt to ``B'' from ``A-3.'' It also cut several other ratings, and said its rating outlook is stable.
S&P said the downgrades reflect its belief that Xerox's non-finance revenue and operating income will be ``significantly less than expected'' this year and next. Moody's Investors Service and Fitch previously cut Xerox debt to ``junk,'' raising the company's borrowing costs.
S&P's move came shortly after Xerox reported a third-quarter net loss, including restructuring charges, of $211 million, or 29 cents per share, on revenue of $3.9 billion. Excluding the charges, Xerox lost 24 cents per share, in line with analyst estimates. Xerox said it its ``cautiously optimistic'' it will post an operating profit this quarter.
Xerox shares traded Tuesday on the New York Stock Exchange (news - web sites) at $7.51, up 19 cents. They are up 62 percent this year, from $4.63.
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