Moody's: Sara Lee outlook stable

Moody's Investors Service said it affirmed the Baa1 long-term and Prime-2 short-term ratings of Sara Lee Corp. and revised the outlook to stable from negative.

The revised outlook anticipates stable operating performance over the next 12 to 18 months, despite some challenges arising from a weak global economy, the agency said. The stable outlook also anticipates that Sara Lee will not return to large share repurchases in the near term.

"Although Sara Lee has fallen short of many of its own goals, management has done a reasonably good job at adjusting to shifting market conditions and conserving cash to offset shortfalls when they have occurred," Brian Weddington, a Moody's senior analyst, said in a statement.

"Financial policy has been a much more important rating driver than financial leverage for Sara Lee. The company has not closed the door on share repurchases, but there clearly has been a high-level shift in priorities in terms of uses of cash that is more balanced than in the past," said Weddington.

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