Yet Another New CEO at Quebecor World, What's Up?

The immediate replacement of Quebecor World Inc. (IQW) CEO Wes Lucas with CFO Jacques Mallette is yet another shuffle in what has been a “revolving door” of executive movements at the Montreal-based printer, says Drew McReynolds of RBC Capital Markets. The analyst noted that this is the fifth CEO Quebecor World has had since Charles Cavell retired in 2003.

In a note he told clients that,

Although the financial and operational background of Jacques Mallette could serve the company well during this challenging period, we believe it is essential for management to maintain continuity on achieving the efficiency targets set up under the five-point transformation plan of Wes Lucas.

While Mr. McReynolds’ “sector perform” rating on Quebecor World shares is unchanged as a result of this move, he said another risk has emerged. The company’s near-term financing strategy also remains unclear, it continues to face possible debt convenant violations and poor visibility on its earnings recovery remain, he added.