S&P: Watson outlook negative

Standard & Poor's said it revised its outlook on Watson Pharmaceuticals Inc. to negative from stable and affirmed its BBB- corporate credit and senior unsecured debt ratings on the company.

S&P said the outlook revision follows Watson's announcement that it expects significantly lower earnings for 2004. The company is also refocusing its business strategy, and it plans a major restructuring of its operations.

The ratings were also affirmed, however, as Watson maintains solid positions in the specialty and generic drug market. It also has a moderate financial profile and a high level of financial flexibility, which will enable it to conduct acquisitions to further expand its specialty pharmaceutical business, according to S&P.

S&P believes Watson will be increasingly acquisitive as it seeks to build its specialty business. Still, the company continues to maintain financial protection measures that support the ratings. Funds from operations to total debt is 38%, and total debt to EBITDA is only 1.7x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.