S&P downgrades Panasonic one notch to A with a negative outlook
Ratings agency Standard & Poor’s today downgraded Panasonic one notch to “A” with a negative outlook, citing pressure on its digital products such as flat panel TVs. The rating, which S&P said it could be lowered again in the future, is the sixth-highest on the agency’s scale of 22. The downgrade came after Panasonic expected a loss of $5.3 billion this year. Ratings agency Standard & Poor’s said that Panasonic’s move to take full ownership of Sanyo Electric and Panasonic Electric Works along with large net losses as a result of business reorganization since 2009 have weakened its financial position.
The rating agency believes Panasonic’s competitive position in core digital products such as flat panel TVs is under strong pressure from global competitors. The forecast came as Panasonic also scrambles to turn around its loss-making television business amid fierce cost competition. Panasonic has announced plans to stop production at two of its Japanese TV panel factories—one making plasma display panels and the other LCD panels—this fiscal year, leaving it with only one plasma panel plant and one LCD plant in Japan.