The rating on Toshiba Corp. reflects the company's solid technological base in information and communications equipment and systems, semiconductors, and displays. The rating also reflects a weakening in the company's business base, illustrated by the vulnerability of its earnings and cash flows to fluctuations in the electronic devices market, despite its diversified business portfolio. In addition, the rating takes into account the company's slightly weak financial profile. Toshiba's earning base has been eroded by its weakening operating performance in its mainstay businesses, such as electronic devices and IT-related equipment, which have faced stagnant demand and strong pricing pressures. In addition, the company has been slow to react to competitive pressures in the global market resulting from improved technological and cost
