Motorola: It’s Junk, Says S&P

Standard & Poor’s today cut its long-term corporate credit rating on Motorola (MOT) by two notches to BB+, from BBB, down to junk bond territory. In cutting its rating, S&P cited the troubles in the company’s mobile device unit, which it expects to extend for some time, resulting in lower profits, higher debt-to-earnings levels and diminished cash flows. Earlier this week, Moody’s warned that it might cut its rating on the company . As the Wall Street Journal notes , S&P expects global handset sales to fall about 10% next year despite lower average prices, further pressuring the company. S&P expects Motorola to report losses for at least the next few quarters. MOT today is up a penny, at $4.33. (link)