View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
October 20, 1995

CREDIT RATINGS

By CBR Staff Writer

Apple Computer Inc’s year-end figures have not gone down well with Standard & Poor’s Corp, which has revised its rating outlook to negative from stable, reflecting concerns about the company’s recent profitability levels and its longer-term ability to achieve market share objectives – but it did affirm its triple-B senior debt and A-2 commercial paper ratings on the company. About $300m of rated debt is affected. The rating reflects Apple’s ongoing strategic challenges in the personal computer industry, offset by the strong balance sheet, financial flexibility, and history of innovative productdevelopment. Licensing initiatives aimed at expanding Apple’s 8% 1994 worldwide market share to a 20% worldwide target have been disappointing to date, and without an expanded market base, it will be increasingly difficult for Apple both to maintain its own software development, and attract third party developers of desirable applications.Although revenue and unit growth were in excess of 20%, operating margins dropped to 3% in the most recent quarter. Operating profitability in the near term is expected to improve, but will remain below 8%, reflecting ongoing pricing pressure. Apple’s rating could be lowered if profitability remains subpar for the rating level or if the company fails to demonstrate progress in achieving its market share goals. Downside cushion is provided by the balance sheet and financial flexibility.

Topics in this article :
Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU