Rolls-Royce share price down as outlook downgraded to negative by Standard & Poor’s
Standard & Poor's (S&P) today downgraded its outlook rating for Rolls-Royce from stable to negative.
The ratings agency, which has dropped its expectations over the manufacturer's profits and cash flow generation for 2016, pinpointed near-term business challenges, particularly in the company's civil aerospace and marine divisions, as the reasoning behind the downgrade.
S&P, which affirmed its A/A-1 long- and short-term corporate credit ratings in the same note, said the change to the outlook reflected that it may possibly lower Rolls-Royce's rating by one notch within the next year and commented that it expected profits to remain weak into 2017.
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Share price for the company fell throughout the course of the day. Shares were trading down 0.8 per cent at 539.5p shortly before 3pm.
City PM approached Rolls-Royce for comment but is yet to receive a response.
In Rolls-Royce's half year results for 2015, the company revealed underlying revenue for the group had fallen three per cent to £6.3bn while underlying profit before tax had tumbled 32 per cent to £439m.
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Rolls-Royce is due to make a preliminary announcement regarding its full year results in February.
Late last year, the manufacturer revealed a number of plans for restructuring, including plans for a new senior management structure, in a move to cut costs and help deliver long-term growth. The announcement came in December, after the company had released a string of profit warnings.