HONG KONG--Moody's Investors Service said Thursday that it has
placed its credit ratings on Panasonic Corp. (6752.TO) under review
for a possible downgrade, after the struggling Japanese electronics
maker reported a massive quarterly loss of nearly $9 billion.
The credit rating firm's current rating on Panasonic's long-term
debt is Baa1, three notches above non-investment, or "junk,"
territory.
"The large expected net loss will damage (Panasonic's) balance
sheet significantly," Moody's said in a statement. The decision to
put the rating under review reflects "increasing concern that
sluggish demand and intense competition will continue to pressure
Panasonic's earnings and leverage," it said.
With the latest quarter's loss, Panasonic now forecasts a second
straight annual loss, with an estimated total loss of more Y1.5
trillion, or around $19 billion, over the two fiscal years.
According to the company, the bulk of the loss stems from
restructuring-related costs as it wrote down the value of its
solar-panel, rechargeable-battery and mobile-handset
businesses.
Panasonic, like other Japanese consumer electronics giants such
as Sony Corp. and Sharp Corp., is going through drastic
restructuring to turn around its unprofitable businesses amid weak
demand for mainstay television sets and other consumer gadgets.
Unable to challenge Apple Inc. (AAPL) and Samsung Electronics Co.
(005930.SE) in the lucrative high-end smartphone market, Japanese
players are trying to find new sources of growth by looking outside
consumer gadgets.
Still, Panasonic's attempt to build a profitable business around
green technology such as rechargeable batteries and solar panels
through its 2009 acquisition of Sanyo Electric Co. has been largely
unsuccessful.
Moody's said in the statement: "Panasonic will focus on its more
competitive businesses, such as appliances and eco-solutions, and
reduce its exposure to more volatile digital products and
devices...However, there is a high degree of execution risk."
Write to Juro Osawa at juro.osawa@dowjones.com
11-01-12 0014ET