Moody's may cut Casio Computer

Moody's Investors Service said it placed under review for possible downgrade the A3 senior unsecured and issuer ratings of Casio Computer Co., Ltd.

The action follows Casio's downward revision of its performance forecast for the third quarter of 2010 and reflects concerns that the company may require some time to restore its profitability and finances, Moody's said.

The agency said it also is concerned that a significant drop in demand for mobile handsets in Japan, in addition to sluggish demand and intense competition for digital cameras, could continue to pressure Casio's earnings. Thus, the company may not be able to restore its operating margin to its traditional 5% anytime soon, Moody's added.

Weak profitability will continue to pressure its cash flow, hindering timely improvement of its previously strong balance sheet, the agency said.

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