Feb. 8 (Bloomberg) -- Sony Corp., which widened its loss forecast for the current fiscal year, had its credit rating lowered one level by Standard & Poor’s because of falling prices, waning demand and tougher competition.
The long-term ratings were lowered to “BBB+,” S&P’s third-lowest investment grade, from “A-,” the ratings company said in a statement today. The outlook was set at “negative,” reflecting a view that the ratings may be cut further in the absence of a sign of recovery in earnings, S&P said.
The announcement follows downgrades by Moody’s Investors Service and Fitch Ratings in the past two months on concern the Japanese electronics maker will have difficulty turning around its unprofitable television business. Last week, Sony more than doubled its annual loss forecast to 220 billion yen ($2.9 billion), blaming a stronger yen, production setbacks caused by floods in Thailand and the cost of exiting a display-panel venture with Samsung Electronics Co.
Moody’s assigned Sony “Baa1,” its third-lowest investment grade, while Fitch gave a “BBB-” rating, one level above junk.
Panasonic Corp., Sony’s closest domestic rival, had its rating cut to the same level as Sony by Fitch on Feb. 6. Fitch said it had a “negative” outlook on Panasonic because of weak economic conditions and competition with South Korean companies.
Earlier this week, Moody’s said it will monitor Sony’s strategies for improving profitability, particularly in its TV business, while reiterating its ratings on Sony.
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