Sun claims that with $5.5 billion in cash and marketable securities, plus a broad range of products, technologies, customers and partners, it is well positioned to attain the twin-goals of sustained profitability and positive cash flow from operations.
Wall Street, though, is unsure. Credit ratings specialist Standard & Poors last week became the latest big-name organization to publicly review Sun following continued and widening losses. S&P is reviewing Sun’s BBB credit rating that, if lowered, increases its burden of debt repayment – Sun has outstanding debt of $1.5 billion.
S&P is concerned about Sun’s current cost structure and ability to improve profitability, adding there is uncertainty about the level and timing of a recovery in IT spending and increasing market acceptance of lower-cost Windows and Linux systems.
The company’s BBB rating suggests Sun’s capacity to meet financial commitments is subject to adverse economic conditions. Sun’s credit rating was last lowered in October 2002, from BBB+ to BBB.
This article was based on material originally published by ComputerWire.
