This outlook change reflects Moody's expectation that the depressed business environment for NSG's advanced materials & devices business will not allow NSG to meaningfully improve its operating performance in the near to medium term.
NSG's advanced materials & devices business which includes micro-optics, glass products for LCDs (liquid crystal displays), and glass disks had been a major earnings contributor until the last fiscal year ended March 2001. The company has also executed significant restructuring in its glass & building materials division, and operating performance remains relatively stable. However, NSG's operating performance in its advanced materials & devices business has been negatively affected by the sharp decline in the demand. Moody's expects that NSG will face challenges to substantially recover its overall earnings unless demand for its products quickly recovers in the intermediate term.
NSG's Baa2 ratings continue to reflect the inherent volatility of the advanced materials & devices business and the need for consistent innovation with new technology and delivery of new products to the user base. The ratings also incorporate NSG's solid market position in the glass & building materials operation in Japan. The company acquired a 20% share of Pilkington Plc in the UK, and plans to form various strategic business alliances.
Nippon Sheet Glass Co., Ltd., headquartered in Osaka, Japan, is Japan's second-largest sheet glass manufacturer. The company is also engaged in the advanced materials & devices business.