raidermatt
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- Joined
- Sep 26, 2000
Moody's/S&P May Cut Disney's Long Term Rating Moody's may cut Disney rating, follows S&P warning
8/5/2002 2:11:07 PM
NEW YORK, Aug 5 (Reuters) - Moody's Investors Service on Monday said it may cut Walt Disney Co.'s (DIS) long-term credit ratings, three days after Standard & Poor's said it may take a similar action.
The rating reviews follow Disney's warning last week that its fourth-quarter profit may fall because fewer tourists are visiting its theme parks.
Moody's may cut Disney's "A3" long-term debt rating, its fourth lowest investment grade, and the "A2" ratings of the entertainment giant's Disney Enterprises and ABC Inc. units. Moody's affirmed Disney's "P-2" short-term rating, suggesting any long-term rating cut would not exceed two notches.
Moody's expressed concern over Disney's theme park operations, viewership and advertising levels at the ABC networks, and Disney's $15 billion debt load. It said waning consumer confidence and geopolitical risks will "challenge" Disney to hold onto its current long-term ratings.
S&P rates Disney's long- and short-term debt "A-minus" and "A-2," equal to Moody's ratings. It said any long-term rating downgrade would likely not exceed one notch.
Disney shares fell to a nearly eight-year low on Friday. They traded Monday afternoon on the New York Stock Exchange at $13.99, down $1.32, or 8.6 percent. They closed one-year ago at $26.83. Disney is based in Burbank, California.
END ARTICLE
In the earnings call, Disney made a point of saying they had cut debt from $14.8 to $13.1.
My understanding of why they are looking at a downgrade is because even with the debt reduction, their debt to earnings ratios are soaring. (Due to reduced earnings forecasts for 4Q).
The stock is continuing to plummet, down almost 8% today. Yes, the Dow as a whole is down also, but by less than 3%. Disney's stock is trading around $14.
8/5/2002 2:11:07 PM
NEW YORK, Aug 5 (Reuters) - Moody's Investors Service on Monday said it may cut Walt Disney Co.'s (DIS) long-term credit ratings, three days after Standard & Poor's said it may take a similar action.
The rating reviews follow Disney's warning last week that its fourth-quarter profit may fall because fewer tourists are visiting its theme parks.
Moody's may cut Disney's "A3" long-term debt rating, its fourth lowest investment grade, and the "A2" ratings of the entertainment giant's Disney Enterprises and ABC Inc. units. Moody's affirmed Disney's "P-2" short-term rating, suggesting any long-term rating cut would not exceed two notches.
Moody's expressed concern over Disney's theme park operations, viewership and advertising levels at the ABC networks, and Disney's $15 billion debt load. It said waning consumer confidence and geopolitical risks will "challenge" Disney to hold onto its current long-term ratings.
S&P rates Disney's long- and short-term debt "A-minus" and "A-2," equal to Moody's ratings. It said any long-term rating downgrade would likely not exceed one notch.
Disney shares fell to a nearly eight-year low on Friday. They traded Monday afternoon on the New York Stock Exchange at $13.99, down $1.32, or 8.6 percent. They closed one-year ago at $26.83. Disney is based in Burbank, California.
END ARTICLE
In the earnings call, Disney made a point of saying they had cut debt from $14.8 to $13.1.
My understanding of why they are looking at a downgrade is because even with the debt reduction, their debt to earnings ratios are soaring. (Due to reduced earnings forecasts for 4Q).
The stock is continuing to plummet, down almost 8% today. Yes, the Dow as a whole is down also, but by less than 3%. Disney's stock is trading around $14.
