Moody's downgrades Panasonic

Moody's Investors Service said it has downgraded Panasonic Corp.'s issuer and senior unsecured ratings to Baa1 from A3. The outlook remains negative.

“The downgrade of Panasonic's ratings reflects our expectation that the company will not be able to improve its profitability to levels in line with those of similarly rated global peers over the next one to two years, given continued weakness in its operating performance and slow progress in turning around its business,” said Masako Kuwahara, a Moody's vice president and senior analyst, in a press release.

Panasonic's performance in the nine months ended Dec. 31, indicates its near-term results will be weaker than Moody's previous forecast, as weak Chinese demand for capital equipment and parts has hurt its industrial solutions segment. Its automotive segment also remains unprofitable, due to upfront investments in prismatic electric battery production and declining auto part sales from the downturn in the auto industry, the agency said.

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