Cemex (CX)

We are keeping our Sell rating on CEMEX, S.A. de C.V. (CX - Analyst Report). The company posted weak results in the first quarter of 2009 with net income of just US$3 million.

The continued weak cement volumes in Spain and U.S. are problematic. The short-term outlook for the company remains highly uncertain based on the downtrend in the residential, industrial/commercial and the infrastructure sectors as well as due to the fall in the real estate prices throughout the world. Moreover, the recent lawsuit filed against the company is problematic.

However, all efforts to reduce its costs and net debt in 2009 are encouraging. Nevertheless, the current credit crunch and the recession in the U.S. are matters of huge concern.