PWC CEO sees write-downs at non-financial US firms
NEW YORK, Feb 6 (Reuters) - The chief executive of accounting firm PricewaterhouseCoopers [PWC.UL] expects more non-financial U.S. companies to report write-downs linked to the credit crisis, showing the problem has the potential to infect a wide swath of corporate America.
"It's not just in banks," Chief Executive Samuel DiPiazza told reporters late on Tuesday. "These securities sit in cash equivalent accounts of industrials; they sit in investment portfolios of pensions."
"We are having to deal with this with thousands of companies, not just a handful of big banks," he said, and added that a "first wave" of write-downs was likely in the current audit cycle this quarter.
U.S. financial services companies such as Citigroup Inc (C.N) and Merrill Lynch & Co MER.N have already reported tens of billions of dollars of write-downs for complex debt that has become illiquid, often because it is made of risky mortgages.
But DiPiazza said non-financial companies are also exposed to the credit crunch through securities in their own investment portfolios.
Last month Bristol-Myers Squibb Co (BMY.N) became among the first companies outside the financial sector to disclose its exposure to the world-wide credit crisis. The drugmaker reported a quarterly loss due to special charges, including a $275 million write-down from securities that had subprime mortgages as a component.
Over the last few months, other non-financial companies such as networking-equipment maker Ciena Corp (CIEN.O) and software company Lawson Software Inc (LWSN.O) have also reported write-downs related to the credit crunch and the housing sector meltdown. But the amount reported by Bristol Myers-Squibb was at the high end.
DiPiazza declined to comment on how big he thought such write-downs would be, saying it varies with companies.
"I will not underestimate the challenge we have working through a lot of complex securities and getting them valued," he said. "We have to ask the question, what's under the surface." (Editing by Tomasz Janowski)
