Briefs: S&P revises down Ericsson outlook

October 26, 2005

Standard & Poor's revised down Wednesday its outlook for Swedish telecommunications group Ericsson to stable from positive.

The credit-rating agency said the downgrade was due to Ericcson's decision Tuesday to buy 75 percent of the assets of telecom group Marconi.

"Although Standard & Poor's acknowledges the strategic rationale for the Marconi transaction in the context of the medium-to-long-term expected developments in the industry, we note that the assets to be acquired will initially weaken Ericsson's earnings and cash flow generation and significantly increase its exposure to the weak wire-line telecoms equipment sector," credit analyst Leandro De Torres said in a news release.

Copyright 2005 by United Press International

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