Q2 losses have cost the electronics giant its star rating. But a breakdown of the figures have given the company reason to remain bright. Geraldine Lambe reports.When Philips Electronics announced an 18% drop in sales and an operating loss in Q2 of E26m last month, its A- rating from Standard and Poor’s immediately began to look vulnerable. Within two days, S&P had reduced the rating to Triple B+, bringing it into line with Moody’s earlier rate cut to Baa1.
“The rating agencies have actually been pretty kind to Philips up to now,” says Rik Fennema, director of credit research at Dresdner Kleinwort Wasserstein. “S&P had given Philips a lot of time to show improvement, but it has taken too long.”
