Moody's lowers Panasonic view to negative

Moody's Investors Service said it affirmed Panasonic Corp.'s A3 long-term issuer rating and senior unsecured bond ratings.

Moody's also said it changed the outlook to negative from stable.

The negative outlook reflects the increasing uncertainty whether Panasonic can generate sufficient earnings to restore its operating margins over the next few years, given the delays in turning its automotive business profitable, the agency explained.

Over the past three years, Panasonic focused on automotive businesses as a growth driver, making sizable investments, Moody's said.

The company invested around ¥200 billion in its Gigafactory, a large auto battery manufacturing plant in the U.S. that it jointly owns with Tesla, Inc., the agency said.

But its battery business remained loss-making in both the fiscal year ended March 2018 and fiscal 2018, Moody's noted.

The agency said it previously viewed this company's automotive strategy positively because it would allow Panasonic to leverage its technological advantages in the growing auto batteries and auto parts business, which is potentially less volatile.

However, Panasonic now projects another ¥15 billion loss for its newly established automotive segment in fiscal 2019, Moody's said.

The agency also said it remains concerned whether other businesses in the automotive segment will turn profitable because of less than expected production volume.

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