CS First Boston downgraded CMS Energy (CMS) to underperform from neutral.
The company suspended its dividend and cut its earnings guidance. Analyst Curt Launer says the suspension of its dividend comes as a surprise given the recent improvements made by CMS in terms of asset sales and liquidity.
Launer says his first impression is future liquidity requirements including $300 million in debt due in the first quarter of 2003, the impact of lower-than-expected 2003 earnings, and write-offs of field services and international assets that have exacerbated CMS's position with its banks, causing dividend suspension.
He cut the $1.55 2003 earnings per share estimate to 50 cents, and cut the $3.55 cash flow to $2.00. He also cut the $11 target to $6.