No signs that the company will come out of red soon, financial group claims
Credit ratings agency Standard & Poor's has downgraded Sony’s credit rating to A-, citing concerns over long-term corporate credit and senior unsecured debt ratings.
The likelihood of Sony's weak earnings persisting “has increased”, the ratings group said.
“There are no signs of a halt to the deterioration in the earnings of the company's core flat panel TV business. In addition, Sony's financial burden is likely to increase in tandem with the company's making Sony Ericsson a wholly owned subsidiary.
“Taking these factors into consideration, we have concluded that we need to review the prospects for Sony's operating and financial performance and verify the effects on the rating.”
Standard & Poor’s’ review comes after Sony reported significant quarterly losses to investors. Last week the company announced a loss of $443 million for the second quarter ending 30th September.
Standard and Poor’s, whose influence has come under scrutiny after downgrading the US’s credit rating, predicts Sony will lose ¥90 billion for fiscal 2011, which would represent a fourth straight year in the red.