S&P drops Conexant outlook to negative

Standard & Poor's said it revised its outlook on Conexant Systems Inc. to negative from stable, reflecting recent sharp declines in revenue and operating profit.

In addition, the agency said it affirmed the corporate credit rating at B-.

The agency said that the ratings on Conexant reflect uncertainty regarding the global economic outlook and prospects for a recovery in demand for the company's products, very high leverage, and reliance on asset sales to retire debt.

The company's modest cash balance and fabless strategy, in which it does not manufacture its own integrated circuits, partially offset these factors, S&P noted.

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