Fitch: Tyco outlook negative

Fitch Ratings said it revised the outlook to negative for Tyco Electronics Ltd. and Tyco Electronics Group SA, and affirmed the BBB issuer default ratings.

The negative outlook reflects the company's meaningfully weaker-than-expected financial results for the first fiscal quarter ended Dec. 26, the agency said.

Ratings reflect the company's conservative capital structure and adequate liquidity with consistent but pressured annual free cash flow, industry-leading positions in large and relatively fragmented markets and balanced geographic manufacturing footprint, according to Fitch.

Concerns include the agency's belief that Tyco Electronics' ability to return operating profitability to historically higher levels will be constrained, despite ongoing divestitures of less-profitable businesses and anticipated cost reductions from restructuring activities as well as cyclical demand patterns and the company's financial policies, Fitch said.

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