Standard & Poor's Ratings Services said Monday it raised its ratings on Broadridge Financial Solutions Inc., concluding that the company's financial performance improved and management reduced financial risks.
The Lake Success, N.Y.-based technology outsourcing company now carries an S&P counterparty credit rating of "BBB/A-2," an upgrade from "BBB-/A-3."
The BBB rating is an investment grade long-term credit rating, while the A-2 is a short-term rating signifying the company can meet its credit obligations. The outlook is "stable."
S&P analysts said Broadridge is in a strong position to service its debt and is only moderately leveraged.
The company's core business in investor communications and securities processing is strong and it has a management team friendly to shareholders, the analysts said.
The company will exit its brokerage clearing business in the second quarter when it closes the sale of Penson Worldwide Inc. in June, which will improve its financial risk, S&P said.
The "stable" outlook reflects S&P's opinion that the company is well situated to maintain its current financial and business profiles.
The company reported on Monday net earnings of $24.9 million, or 18 cents per share, compared with $40.9 million, or 29 cents per share, a year ago.
The results included a loss from discontinued operations of 4 cents per share.
Excluding that, the company reported net earnings from continuing operations of $30.8 million, or 22 cents per share, compared with $41.2 million, or 29 cents a year ago.
Analysts surveyed by Thomson Reuters had expected 21 cents a share.
Broadridge's shares fell 42 cents, or 1.9 percent, to close Monday at $22.25.
