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Sony's Credit Rating Takes Hit
The electronics giant has seen some big losses in recent months, and the financial world is taking notice.
Sony has had some tough competition across its many business ventures in recent years, and the massive electronics company hasn't come out unscathed. On the heels of a huge $2.03 billion dollar loss in the third financial quarter from October to December of last year, the financial firm Standard & Poor's has lowered the company's "long-term corporate credit and debt ratings" to BBB+, a one-notch downgrade from its previous position at an A- credit rating. A company's credit rating indicates S&P's opinion about an organization's ability to meet its financial obligations in full and on time.
The bad news for Sony doesn't end there. S&P also declared in its statement that its outlook for Sony's ability to recover in the coming months isn't exactly bright. The report continues: "The outlook is negative, reflecting our view that we could lower the ratings further if we see no meaningful sign of recovery in Sony's earnings within six to 12 months…We base the downgrade on our view that severe circumstances in Sony's mainstay electronics businesses make a strong recovery in earnings unlikely."
S&P cites Sony's flagging TV business as a chief contributor to the problem, as well as increasing price pressure from competitors on important products like the aforementioned TVs as well as mobile handsets.
Interestingly, the S&P report makes no mention of Sony's gaming business. Nonetheless, the fate of the larger company is likely to have a significant effect on the way Sony handles products like the PS3, Vita, and other future gaming projects.
[via Reuters]
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