Motorola, which could see its credit rating cut, is the latest balance-sheet whipping boy. Because Motorola reported a first-quarter operating loss , investors are rightly worried about the company's future prospects. Add that debt picture to a fuzzy outlook for 2001, and there's a serious question as to whether Motorola will have the financial horsepower to compete. Prior to Motorola's earnings report, Merrill Lynch analyst Michael Ching noted the company improved its cash position, but not through operations. Of course, you wouldn't have had those Motorola worries without those ever-persistent Lucent cash concerns.
Lucent officials call the chatter about bankruptcy hogwash.
Ching noted that Lucent's recent dealings have improved its debt position. The big question is when Lucent will post a profit. The longer Lucent loses money, the worse its debt situation looks. As for Palm, its cash position will get worse as it clears out inventory. In other words, one wrong move from Palm and the balance-sheet hawks will be circling.