Sony’s Rating Cut by S&P on Earnings Recovery Concerns
Sony Corp. (6758), reeling from four straight annual losses, had its credit rating lowered one level by Standard & Poor’s because of concerns about an earnings recovery by the Japanese consumer-electronics maker.
The company’s long-term ratings were lowered to BBB, S&P’s second-lowest investment grade, from BBB+, the ratings company said in a statement today. The outlook was set at negative, reflecting a view that ratings may be cut again in the absence of “solid signs of recovery” in Sony’s credit quality within a year, S&P said.
Sony cut its annual profit forecast 33 percent last month as it suffered from slowing demand and a strong yen. A recovery in the earnings of Sony’s main consumer-electronics businesses will remain slow, and there are downside risks in the businesses, S&P said.
It’s the second downgrade for Sony this year by the S&P, which cut the Tokyo-based company’s ratings in February one level from A-.
Moody’s Investors Service on Aug. 6 placed the company’s credit ratings on review for downgrade, citing weaker demand and a stronger yen. The maker of Cyber-shot cameras and Bravia TVs had its long-term rating already cut one level by Moody’s in January.
Sony shares rose 0.2 percent to close at 969 yen in Tokyo today, compared with a 0.3 percent advance by the benchmark Nikkei 225 Stock Average.
To contact the reporter on this story: Mariko Yasu in Tokyo at firstname.lastname@example.org.