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The Worst Appears Over For North American Auto Suppliers, But Competition Remains Tough Jun 10
Standard & Poors, June 2010
Abstract
In just one year, the financial performance of the rated North American auto suppliers has improved dramatically. In the first half of 2009, a number of industry participants and analysts expressed concern about the risk of a systemic collapse of the sector. But recently, the sector has returned to profitability and, in most cases, companies have reported positive free operating cash flow and improved liquidity. Revenues, EBITDA, and cash flow of these suppliers dropped sharply during the downturn until hitting what we believe was the bottom of the cycle for them in the first and second quarters of 2009. But debt stayed fairly level through the downturn (aggregate debt reduction since the September 2009 quarter was mostly a function of...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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