During the past two years, the company's capital structure has been strengthening, the firm noted. The company's annual interest expense was lowered by approximately $200 million, due to the conversion of $820 million of convertible bonds to equity, and the refinancing of about $8.6 billion of debt.
"We are pleased with the upgrade received from Fitch Ratings, which is in line with our plan of returning to an investment grade capital structure," CEO Fernando A. Gonzalez stated.
Fitch Ratings' outlook on the company remains stable, according to the firm's note.
CEMEX is a global building materials company that provides products and services to customers and communities in more than 50 countries.
Separately, TheStreet Ratings team rates CEMEX SAB DE CV as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CEMEX SAB DE CV (CX) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, notable return on equity and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CEMEX SAB DE CV reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CEMEX SAB DE CV continued to lose money by earning -$0.35 versus -$0.64 in the prior year. This year, the market expects an improvement in earnings (-$0.04 versus -$0.35).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 21.3%. Since the same quarter one year prior, revenues fell by 11.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The gross profit margin for CEMEX SAB DE CV is currently lower than what is desirable, coming in at 33.97%. Regardless of CX's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 3.15% trails the industry average.
- CX's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 30.92%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- You can view the full analysis from the report here: CX Ratings Report