Standard & Poor’s Ratings Services said Friday it affirmed Gannett Co.’s ratings, including its investment grade “A-” corporate credit rating, to reflect the newspaper publisher’s conservative financial policy.
The McLean, Va.-based company’s ratings had been placed on CreditWatch with negative implications on July 24.
Gannett’s “A-2” commercial paper rating, which was not on CreditWatch, was also affirmed.
Credit analyst Emile Courtney said S&P affirmed the ratings because it expects that Gannett will pursue a conservative financial policy to help withstand the ongoing operating challenges facing the newspaper industry.
The outlook on the ratings is negative. S&P said it expects Gannett’s newspaper segment to experience a mid-single digit revenue decline in 2008. The ratings service said the negative outlook reflects the possibility that the decline will be more severe, which could lead to a ratings downgrade.
S&P said Gannett’s ratings benefit from the company’s strong and geographically diverse portfolio of newspapers and television broadcasting properties, as well as its healthy internal cash generation.
S&P attributed the decline in newspaper advertising to inherent cyclicality and a secular shift away from print advertising.
Gannett shares fell 70 cents to $44.16 in afternoon trading.