Embattled PC vendor Acer Inc (宏碁) yesterday suffered another setback as Fitch Ratings Ltd downgraded its credit profile for the Taiwanese company and retained its negative outlook.
The moved marked the ratings agency’s second downgrade of Acer’s oultook since May 16.
It also came a week after the world’s fourth-largest PC maker reported a net loss of NT$13.12 billion (US$442.5 million) for last quarter, and that its chairman and chief executive officer Wang Jeng-tang (王振堂) had tendered his resignation.
In May, Fitch cut Acer’s long-term foreign and local currency issuer default rating to “BB” from “BB+.” Yesterday, it cut the rating further to “BB-,” three notches underneath the lowest “investment-grade” rating.
“The downgrade reflects Fitch’s expectation that demand for PCs will remain subdued, that Acer’s market position will remain weak and that operating losses will continue,” the ratings agency said in a statement.
Acer’s worldwide PC shipments declined 35 percent year-on-year last quarter, while its share of the PC market fell to 6.7 percent from 9.5 percent over the same period, according to International Data Corp.
Fitch said the computer manufacturer was not likely to see a return to profitability in the short term, despite adopting a strategy differentiation and employing cost-cutting measures.
“Any meaningful margin recovery will be very slow,” Fitch said.
Acer founder Stan Shih (施振榮), who now leads a “transformation advisory committee” within the company’s board to help overhaul the business, yesterday said it would take three years for the firm to regain its competitiveness, the Central News Agency reported.