Standard & Poor's Corp. has revised the outlook on its BBB long-term corporate credit rating for construction machinery maker Komatsu Ltd. to negative from stable.
"The outlook revision reflects rising concerns over Komatsu's ability to sustain its current level of earnings and cash flow over the next year or two, amid increasing business risks in the global construction machinery industry," S&P said.
S&P has affirmed its BBB rating on the firm, citing its strong market position in the global construction machinery industry and potential to mitigate a prolonged downturn in domestic demand.
But it noted that its two major overseas markets -- the U.S. and Europe -- "are likely to experience a marked decline in demand and increasing price competition over the next couple of years, which could result in weaker profitability for Komatsu."