Fitch: Stable Trends For U.S. Consumer Products In 2003.Business Editors NEW YORK--(BUSINESS WIRE)--Jan. 23, 2003 Brand and market investment, strong balance sheets and lean cost structures will extend into 2003 for the U.S. consumer products sector, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a special report by Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. . The sector has seen increased financial flexibility and improved credit strength amid high U.S. and European unemployment levels and Latin American financial turmoil over the last year, due largely to cost reduction, effective working capital management (which has led to strong cash flow generation), and investment in core brands and markets. "A further downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in global economies could negatively impact sales, especially for durable goods durable goods Goods, such as appliances and automobiles, that have a useful life over a number of periods. Firms that produce durable goods are often subject to wide fluctuations in sales and profits. Also called consumer durables. businesses," said Karen Lynch Ghaffari, Director, Fitch Ratings. "Nonetheless, consumer products companies that focus on cost reduction, core brand and market investment and cash flow generation will be best equipped to manage through future economic downturns." During 2003, cash flow generation should remain strong as companies continue to focus on efficient working capital usage and increasing operating profitability. However, the level of net free cash flow is anticipated to decline from levels in 2001 and 2002 as the significant improvements in working capital over the past two years will be difficult to replicate rep·li·cate v. 1. To duplicate, copy, reproduce, or repeat. 2. To reproduce or make an exact copy or copies of genetic material, a cell, or an organism. n. A repetition of an experiment or a procedure. . "Given the high cash balances and level of cash flow generation at consumer product companies, spending on acquisitions and share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. is anticipated to continue in 2003," said Ghaffari. 'U.S. Consumer Products: Stable Trends Expected in 2003' is available on FitchResearch, the Fitch Ratings subscription-based web site at 'www.fitchratings.com'. |
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion