S&P cuts LG Electronics

Standard & Poor's said it lowered the long-term corporate credit rating on LG Electronics Inc. to BBB- from BBB, along with its senior unsecured debt rating to BBB- from BBB.

The outlook is stable.

The downgrade mainly reflects the company's weakening operating performance and worsening financial risk profile on a fully consolidated basis, including LG Display Co. Ltd. and LG Innotek Co. Ltd.

S&P said it expects LG Electronics group's profitability to remain weak in 2011, mainly due to losses in its handset and LCD panel businesses.

The agency said it expects the group's operating margin in these businesses will not turn positive for at least a few more quarters.

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