S&P cuts Toshiba outlook to negative

Standard & Poor's said it revised the outlook on its BBB+ long-term corporate credit rating on Toshiba Corp. and two of its subsidiaries to negative from stable, reflecting increasing concerns that Toshiba's financial improvement will fall behind its original forecast.

The prospects for a recovery in Toshiba's revenue and an improvement in the company's financial profile over the next 12 to 24 months are now questionable, mainly due to the sharp deterioration in the semiconductor market, which includes Toshiba's core NAND flash memory products, the agency said.

S&P added that the BBB+ long-term and A-2 short-term corporate credit ratings were affirmed.

According to the agency, Toshiba announced its revised business forecasts on Sept. 19, adding that the company's operating income/loss for the first half of fiscal 2008 was revised downward to a net loss of ¥30 billion from the company's original forecast of a net profit of ¥70 billion made at the beginning of fiscal 2008.

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