Standard & Poor's Rating Services on Thursday raised its corporate credit rating on New York-based CBS Corp., citing improved credit metrics and financial flexibility.
S&P raised its rating on CBS' credit to "BBB" from "BBB-." Both ratings are considered investment grade. The ratings firm also raised its assessment of the company's senior unsecured debt to BBB from BBB- and on the company's short-term debt to A-2 from A-3.
The agency said its outlook for CBS is stable.
In addition to its flagship stations, CBS owns local stations, The Showtime Network, CBS ratio, outdoor advertising, CBS Interactive and other businesses.
S&P noted that the television and radio broadcaster's debt levels have fallen, and that the company should be able to maintain or reduce that level, irrespective of the increased advertising expected with the Olympics and 2012 elections coming up,
Credit analyst Michael Altberg also said CBS's profit "could be less volatile in the future."
S&P pointed to growing proceeds from rerunning programs and streaming them on services like Netflix and Amazon.com as helping to balance out typical revenue ups and downs. Advertising revenue contributed about 62 percent of CBS' total revenue for the first nine months of 2011, down from 64 percent last year.
The ratings agency also said continued growth at cable networks and higher ad rates at the TV network are helping the company's profitability, which returned during the third quarter to the peak levels the company reported in 2006 and 2007. However, there is some concern about revenue softening the rest of this year and in 2012.
Over the longer term, S&P said it expects "ongoing audience fragmentation, slowing growth in broadcast TV ad spending, and the potential for structural pressure in the radio industry."
"We believe the company has well-established franchises and, like competitors, will continue to need to adapt the licensing and monetizing of its content as technology and viewing habits shift online in a manner that does not jeopardize its core businesses," Altberg wrote.