Fitch lowers Pitney Bowes credit ratings to 'BBB'

NEW YORK (AP) — Fitch Ratings downgraded its ratings for mailing-equipment maker Pitney Bowes Inc. and an international subsidiary by one notch on Monday, citing concern over falling revenue.

Fitch cut the Stamford, Conn.-based company's default rating and unsecured revolving credit, term loan and notes and the default rating of its Pitney Bowes International Holdings subsidiary to "BBB" from "BBB+." Those ratings remain investment grade.

It lowered the subsidiary's preferred stock and its long-term issuer default rating to "BB+" from "BBB-." These new ratings are considered non-investment grade, or "junk."

Fitch also assigned a "negative" outlook to all the ratings.

The ratings agency said its main concern was "the downward trajectory" of Pitney Bowes' revenue. It said second-half 2011 financial results were weaker than expected and haven't recovered.

"Revenue declines continue to accelerate, driven by escalating weakness in the small and medium business space," the agency said.

Fitch said some of the weakness could be temporary, but said that would indicate more volatile cycles for the company's business.

The company said in a statement Monday it was "confident that it is pursuing a sound business strategy that will deliver maximum shareholder value over the long term," including investments in digital technology and managing a "prudent" capital structure.

The company said cash flow generation during 2011 was $1.03 billion, the highest in its history.

Last week, Pitney Bowes reported that fourth-quarter revenue fell 7 percent but profit rose to $257.5 million from $63 million in part because of a tax benefit from discontinued operations. The company said that some large business customers delayed purchases, which hurt revenue.

The results were released the same week that the U.S. Postal Service said the number of items mailed during the last quarter fell 6 percent decrease, much of it in first-class mail.

In afternoon trading, Pitney Bowes shares rose 2 cents to $18.52.