Exxon Stripped of AAA Rating by S&P

After being rated at AAA by S&P since 1967, Exxon Mobil Corp. was just stripped of the gold-plated top grade by the ratings firm amid the ongoing price pressures in the oil patch.

S&P had placed Exxon on watch for a potential downgrade on Feb. 2, following the massive firm's lowest quarterly profit in 13 years, on a day when it cut ratings on 10 of its rivals, including Chevron Corp. Now, Exxon is expected to post even worse earnings on Friday, with analysts expecting earnings to hit a 17-year low.

There are now just two U.S. companies S&P has at AAA--fellow Dow components Johnson & Johnson and Microsoft Inc.

S&P said the company's "credit measures will be weak for our expectations for a AAA rating due, in part, to low commodity prices, high reinvestment requirements and large dividend payments." This as Exxon's debt levels have "more than doubled in recent years, reflecting high capital spending on major projects in a high commodity price environment and dividends and share repurchases that substantially exceeded internally generated cash flow."

Exxon now bears a AA+ rating. It is back on a stable outlook from S&P, indicating that no more cuts are in store.

Shares briefly ticked lower on the announcement but have reversed the move already; they're up 0.3% at $87.63.

This is an excerpt from our Market Talk stream. Market Talk, a feature of Dow Jones Newswires, provides real-time analysis of breaking news, as well as running commentary on financial market activity.Â

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April 26, 2016 12:25 ET (16:25 GMT)

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