© Reuters. FILE PHOTO: Illustration photo of a Thomas Cook logo

LONDON (Reuters) – Credit ratings agency S&P Global (NYSE:) revised its outlook for British tour operator Thomas Cook (L:) to “negative” from “stable” on Thursday after the company reported a sharp fall in earnings and cut its profit forecast earlier this week.

Analysts at S&P, who have a “B+” issuer credit rating on Thomas Cook, said they revised their outlook down to reflect “significant deterioration” in operating performance, cash flow generation, and credit metrics.

“We expect full-year 2019 to be challenging, with evidence already of softer winter bookings, continuing difficulties in the UK tour operator market exacerbated by uncertainties around Brexit, and the ever-present event risk in the travel industry,” they wrote.

Thomas Cook’s weak results – its second profit warning in as many months – drove S&P’s ratings-adjusted leverage measure for the company up to 5.9 times debt to EBITDA, from 4.8 times in 2017.

S&P’s negative outlook signals it could lower its ratings on Thomas Cook in the next year in the event of “an adverse Brexit outcome” or lack of performance improvement keeping leverage above 5.0 times debt-to-EBITDA, the analysts said.

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