DETROIT -- Standard & Poor's credit rating service has dropped its outlook on Yazaki International Corp. from stable to negative. Most of the company's revenues come from the automotive supplier Yazaki North America Inc.
Standard & Poor's analyst Nancy Messer said the lowered outlook stemmed from Yazaki's weaker-than-expected financial performance and cash flow, as well as increased volatility in its earnings.
In a statement to Automotive News, Yazaki North America CEO George Perry said Friday that his company has been hurt by rising prices of copper and resins. Yazaki makes electrical distribution systems, electronics, instrumentation, connectors and components.
The strength of the peso has offset Yazaki's cost-cutting measures at its plants in Mexico, Perry added. "Countermeasures are being taken for each of these factors, but there's no denying their impact on the current-year financials," he said.
Standard & Poor's maintained Yazaki International's corporate credit rating of BBB. That rating suggests the company is more likely to be affected by adverse business conditions than higher-rated companies.
Yazaki North America, of Canton, Mich., ranks No. 14 on the Automotive News list of the top 150 suppliers to North America with North American original-equipment automotive parts sales of $2.89 billion in 2004.
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