Fairfax Media's credit rating outlook has been boosted following a difficult couple of years of cost reductions and job cuts.
Standard & Poor's has revised its outlook on the company's long-term BB+ rating from negative to stable.
That means the company's debt still has a junk rating, rather than an investment grade, but Fairfax is considered less likely to default on loans.
S&P complimented Fairfax management for its credible strategy in stabilising and diversifying the company's earnings.
The publisher of The Australian Financial Review, The Sydney Morning Herald and The Age has been carrying out plans to remove 1,900 staff over three years, as part of measures to reduce its high costs.
Credit analyst Graeme Ferguson also highlighted the growing prominence of Fairfax's Domain real estate business, and its event hosting operations.
However, a credit rating upgrade was unlikely in the short term given the level of uncertainty about the media industry, such as declining newspaper revenues, S&P said.
"We may consider upward rating action if Fairfax establishes a track record of sufficiently offsetting the reduction in print earnings with new and sustainable earnings streams, while maintaining a prudent financial approach," Mr Ferguson said.
Further evidence of meaningful cost cuts would also support a credit rating upgrade, he said.
Fairfax's underlying profit grew by 48.5 per cent in the first half of 2013/14 to $86.4 million.
Its shares were up a quarter of a cent at 92.75 cents at 1205 AEST.
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