Nissan Motor Co. took another hit as the automaker’s debt rating was cut on concerns the next two years will be marked by slowing sales and a preoccupation with cleaning up after the scandal involving Carlos Ghosn.
The company’s rating was lowered for the first time in a decade by S&P Global Ratings to A- from A. The outlook on the long-term debt score is stable, the rating firm said. The company’s A2 grade at Moody’s Investors Service also was placed on review for a downgrade.
Nissan CEO Hiroto Saikawa (Kiyoshi Ota/Bloomberg News)
Nissan reduced its full-year earnings forecast after third-quarter profit missed analysts’ estimates, adding to the headwinds for a carmaker struggling with the fallout from the arrest of Ghosn, the former chairman. Sales in the United States plunged 19% in January amid an industrywide slump, intensifying the pressure on CEO Hiroto Saikawa as he tries to ease tensions with partner and shareholder Renault SA. Nissan is cutting as many as 700 workers at a Mississippi factory because of slowing truck and van sales.
“Given severe business circumstances in the automotive business, we believe the company will find it difficult to restore its weakened profitability over the next one to two years,” S&P said. “It will take time to stabilize its management.”
The company declined to comment.