Credit rating agency Standard & Poor’s downgraded Hewlett-Packard’s credit rating earlier this week, citing poor policies, a high turnover rate among top executives and an unclear strategy. HP’s local and foreign long-term debt ratings now sit at BBB+, down from A, making it more expensive for the company to borrow money. The firm also cut HP’s short-term rating to A-2 from A-1. ”We have concerns that HP’s inconsistent growth strategies and high levels of board of director and senior management turnover have elevated the level of operational and execution risk in the near term,” S&P analyst Martha Toll Reed said in a statement. The agency also said that HP’s $10.2 billion Autonomy acquisition has reduced the company’s liquidity and financial flexibility. S&P’s press release follows below. More →
Facing stiff competition from Samsung, LG, and Apple, Motorola Mobility has seen a slump in its share price and market share following a recent downgrade from analyst firm BMO. According to Dow Jones News Wires, Motorola Mobility’s share of the Android market took off like a rocket when it introduced the highly sought-after Motorola DROID on Verizon in 2009. However, its Android share fell from 33% last year to just 14% in the first quarter as other manufacturers began pumping out competing Android devices, some at lower price points. Reportedly, BMO has cut Motorola Mobility’s earnings per share target for the year and has dropped its price target from $26 to $19. Motorola Mobility last closed at $22, down from its 52-week high of $36.54.
In a note to investors on Thursday, Citigroup analyst Jim Suva cut his rating on shares of RIM stock from Buy to Hold, dropping his price target from $80 to $45. Suva had upgraded his rating on RIM shares from Sell to Buy back in February on the assumption that the Waterloo, Ontario-based company would take advantage of Nokia’s plummeting market share. “We believe RIMM is letting this opportunity slip,” the analyst said on Thursday. Suva continued, ”Thus far our supply chain checks show that RIMM’s new models have not yet been certified by major wireless carriers and are not in mass production, which concerns us as typically 30-40 days prior to launch new product should be in mass production.” Earlier this month, BGR exclusively reported that RIM’s BlackBerry Bold 9900 smartphone will not launch until September, despite its unveiling at BlackBerry World this past May. More →
“We no longer anticipate Research in Motion recovering to participate in the mainstream of smartphone industry growth.” Those are the words of Matthew Robison, an analyst with Wunderlich Securities, which recently downgraded RIM’s stock. Robison argues that RIM is going to lose the consumer interest that it has built over the last few years. “Our long-term forecast anticipates a role supplying business-oriented devices, both mid-range and high end, as well as cloud-based services via the BlackBerry Network.,” Robison said. “We expect the consumer mix gained over the past two years to churn off, and that earnings will decline after 2013 and eventually grow again on demand that is largely associated with business users.” Robison said the PlayBook is selling well relative to other tablets, “other than the iPad,” but that “there’s little indication that the PlayBook has registered with consumers outside the loyal BlackBerry installed base.” We’ve leaked and had hands-on time with most of RIM’s 2011 lineup, and while there’s a definite spec boost across the board, the phones lack the appealing features of more robust iOS and Android devices. Worse yet, the company only revealed one new device during its annual BlackBerry World 2011 conference, and even that offered very little in the way of innovation that might attract the consumer market. More →
For the first time in thirteen years, Nokia’s credit rating has been downgraded by Standard & Poor’s Rating Service. The Finnish phone maker, which has held an A rating since 1998, has been under the financial microscope in recent years due to the rise of its competitors and, more recently, for its software deal with Redmond-based Microsoft. “The downgrade reflects the revision of our business risk profile assessment on Nokia to ‘satisfactory’ from ‘strong,’” writes S&P in its report. “We expect that Nokia’s smartphone portfolio will make further significant market share losses during 2011 and 2012 until it has completed its adoption of Microsoft’s Windows Phone software as its new primary software platform for smartphones.” The company’s new credit rating is A-. Nokia’s smartphone market share fell 9-points last year, from 40% in Q4 of 2009 to 31% in Q4 of 2011. The company’s stock was trading down slightly on the news. More →