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S&P lowers credit outlook for St. Jude Medical

NEW YORK (AP) -- Standard & Poor's Ratings Services lowered its outlook on St. Jude Medical Inc. on Monday, saying the company is taking on more financial risk because its debt is increasing.

S&P now has a "negative" outlook on St. Jude's credit, down from "stable." The rating agency said it could downgrade St. Jude Medical's credit rating within two years if the heart-device maker's credit metrics don't improve. The firm has an "A'' rating on St. Jude's credit. That rating is investment grade, five notches above "junk" status.

S&P said St. Jude's first-quarter results were weaker than expected and the company has taken on more debt to fund stock repurchases, leaving St. Jude with high leverage by its own standards. It said the company could reduce its credit risk by paying back more debt.

Shares of St. Jude rose 60 cents to close Monday at $45.66.