Fitch lifts STMicroelectronics view to positive

Fitch Ratings said it revised STMicroelectronics NV’s outlook to positive from stable.

Fitch also said it affirmed the company’s issuer default rating and senior unsecured rating at BBB-.

The ratings are supported by the company’s strong position within a number of key growth segments in the semiconductor market, the agency said.

The maintenance of a conservative financial policy has offset weaker cash flow generation compared to industry peers, Fitch said.

The restructuring and exit of unprofitable business lines over the past five years is nearing completion, leaving a more focused business that is better positioned to fund research and development, manage cyclical downturns and compete within its areas of focus, the agency said.

The positive outlook reflects a potential turning point in the company’s credit profile on a 12- to 24-month view, driven by higher operating margins and sustained improvements in free cash flow, Fitch said.

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