Standard & Poor's (S&P) today expressed concern about the volatility of Fairfax Media Ltd's earnings and changed the outlook on the company's credit rating to stable from positive.

The Australian-based owner of substantial media assets in New Zealand had its credit rating affirmed at BB plus.

Fairfax's second-half result was expected to be significantly below the first half's, and comparable with the cyclically low earnings generated during the peak of the global financial crisis.

The anticipated deterioration in the second half was outside S&P's previous expectations.

S&P said the rating could be cut if the structural erosion of the group's print-based revenue materially accelerated and was not offset by new and defensible revenue streams.

"In addition, we may lower the rating on the group if debt-to-earnings before interest, tax, depreciation and amortisation is sustained above three times due to persisting weak operating performance, debt-funded acquisitions, or a more shareholder-friendly approach to capital management."

S&P had growing concerns regarding the volatility of the group's earnings, particularly from the metropolitan newspaper businesses.

But S&P believed the company was adequately positioned to continue to expand its online businesses.

This, together with a disciplined approach to capital expenditure and dividends, should allow the group to maintain a financial risk profile that is in line with the BB plus rating in the next 12 months.