S&P cuts Industrias Unidas view to negative

Standard & Poor's said it revised its outlook on Industrias Unidas SA de CV (IUSA) to negative from stable and affirmed the company's corporate credit and senior unsecured ratings at B.

The rating action follows the release of Industrias Unidas' third-quarter earnings, which were below the agency's expectations. S&P said the negative outlook reflects the uncertainty and challenges from the downturn in Industrias Unidas' end markets, particularly in the United States.

The rating on Industrias Unidas reflects the inherent cyclicality of the construction industry, commodity price volatility, competitive pressure on core products and markets, low operational margins and high leverage relative to operating cash flow generation, S&P said.

These factors are partially offset by the company's leading market positions in Mexico and the United States, its diversified product mix, some geographic diversification and the agency's expectation that Industrias Unidas will continue to follow a disciplined commercial strategy and increase its offering of value-added products and its liquidity access.

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