NEW YORK, Aug 10 (Reuters) - Standard & Poor's on Tuesday said it may cut Verizon Communications ratings, noting the telecommunications company has a limited ability to reduce its debt and improve its earnings in order to reduce its leverage this year.
S&P currently rates Verizon A, the sixth highest investment-grade rating. Any downgrade would likely be limited to one notch, the credit ratings agency said.
Verizon's leverage -- a measure of debt relative to earnings before interest, taxes, depreciation and amortization -- is currently around three times, which is high for its ratings, S&P said.
Leverage below two times is more appropriate for the A rating, which reflects modest financial profile, S&P added.
Verizon last month posted a quarterly loss due to a $2.3 billion charge for job cuts but wireless customer growth and landline profit margins impressed investors. For details, see
((Reporting by Karen Brettell; Editing by Gary Crosse)) Keywords: VERIZON RATING/SANDP (karen.brettell@thomsonreuters.com; +1-646-223-6274; Reuters Messaging: karen.brettell.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
S&P currently rates Verizon A, the sixth highest investment-grade rating. Any downgrade would likely be limited to one notch, the credit ratings agency said.
Verizon's leverage -- a measure of debt relative to earnings before interest, taxes, depreciation and amortization -- is currently around three times, which is high for its ratings, S&P said.
Leverage below two times is more appropriate for the A rating, which reflects modest financial profile, S&P added.
Verizon last month posted a quarterly loss due to a $2.3 billion charge for job cuts but wireless customer growth and landline profit margins impressed investors. For details, see
((Reporting by Karen Brettell; Editing by Gary Crosse)) Keywords: VERIZON RATING/SANDP (karen.brettell@thomsonreuters.com; +1-646-223-6274; Reuters Messaging: karen.brettell.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.