S&P Cuts Sony Debt Ratings, Citing Weak Electronics Trends
Debt ratings agency Standard & Poor's on Wednesday cut its debt ratings for Sony Corp., citing a lack of momentum in the electronics business of the entertainment and consumer electronics conglomerate.
"The company's mainstay consumer electronics businesses will be key to a recovery in profits, and we still see some downside risk in the businesses," S&P said, signaling it has little hope of a near-term turnaround of losses in the electronics field.
It reduced its rating on Sony, but kept it at investment grade levels, which signals that it continues to feel the company is credit-worthy and financially solid enough.
But S&P said it has a "negative" outlook for Sony debt though, which means further downgrades are possible.
The credit agency had previously lowered Sony's debt rating in February.
Last month, Sony reported a wider net loss for the three months ended June and lowered its net profit forecast for the full fiscal year through March to ¥20 billion yen ($257 million) from ¥30 billion previously. The company said weak earnings from key consumer products such as TV sets, compact digital cameras and personal computers were weighing on its bottom line.