By Mariko Yasu - Nov 4, 2011 3:32 PM GMT+0700
Sony Corp. (6758) had its credit rating placed on watch for a possible downgrade at Standard & Poor’s, which cited weakening earnings at its TV business and the impact from purchasing Ericsson AB’s stake in their phone venture.
The “A-” long-term corporate credit and senior unsecured debt rating is being put on credit watch with negative implications, Standard & Poor’s said in a statement today. S&P affirmed the “A-2” short-term rating of the Tokyo-based Sony.
“The likelihood of Sony’s weak earnings persisting has increased as there are no signs of a halt to the deterioration in the earnings of the company’s core flat panel TV business,” S&P said. “In addition, Sony’s financial burden is likely to increase in tandem with the company making Sony Ericsson a wholly owned subsidiary.”
Earlier this week, Japan’s largest consumer-electronics exporter forecast its fourth consecutive annual loss and slashed television sales targets after the yen reached a postwar high and floods in Thailand cut production.
The maker of Bravia TVs is taking a 50 billion-yen ($641 million) charge for streamlining its main TV operation, which is estimated to lose 175 billion yen this fiscal year, Sony said Nov. 2.
To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net
To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
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