Standard & Poor's Ratings Services has revised its outlook on Paris-based telecommunications equipment maker Alcatel-Lucent to "negative" from "stable."

The ratings agency also affirmed its "BB-/B" long- and short-term corporate credit ratings on the company. Both "BB-" and "B" ratings are considered non-investment, or "junk" grade.

"The outlook revision primarily reflects our concerns about the slow pace of improvement of Alcatel-Lucent's margins and the group's large negative free cash flow," said Standard & Poor's credit analyst Patrice Cochelin in a statement.

S&P is also concerned that the company's recently announced management changes could "create further disruption for the company at a time when operating performance remains weak and carrier demand is softening," he added.

Both Alcatel-Lucent's non-executive chairman and its chief executive will step down by the end of the year.

Source:AP News