Sony’s Credit Rating May Be Cut to Junk by Moody’s After LossNick Turner
Sony Corp.’s credit rating may be downgraded to junk by Moody’s Investors Service Inc. after the Japanese electronics company posted a loss and cut its earnings forecast, signaling that its turnaround effort is faltering.
Moody’s has placed Sony’s Baa3 long-term senior unsecured bond rating on review for a downgrade, the credit-rating company said today in a statement. Baa3 is Moody’s lowest investment-grade rating.
The move represents the latest blow for the Tokyo-based electronics pioneer, which once dazzled consumers with compact discs, Trinitron color TVs and the Walkman. After years of losing ground to Asian rivals such as Samsung Electronics Co., the company is struggling to mount a comeback under Chief Executive Officer Kazuo Hirai.
“The rating actions reflect the slow progress being made in improving overall profitability,’’ Moody’s said in its statement. “Weak earnings across the majority of reporting units suggests the potential for a much longer period of restructuring and financial weakness than previously expected.”