• Moody's downgrades Sony on slump, competition
By The Associated Press
TOKYO (AP) – Moody's Investors Service lowered its long-term debt rating on Sony Corp. by a notch to A3, citing concerns about slumping electronics demand and intensifying competition. It was the first downgrade for Sony since December 2005, when it earned its A2 rating. On Wednesday, Moody's also gave a "negative" outlook for Sony, meaning the rating could be cut again.
"The global recession has caused a significant slowdown in demand for Sony's major electronics products, such as flat-panel display TVs and digital still-cameras," the U.S. credit rating agency said Wednesday. “These rating actions reflect Moody's concern that slowing growth in demand and intensifying competition in major electronics products, as well as the strong yen, will continue to pressure Sony's profitability.”
The maker of the PlayStation 3 game console and Bravia flat-panel TVs lost 98.9 billion yen ($1 billion) for the fiscal year through March (story here). It is not expecting a quick recovery and is projecting a 120 billion yen ($1.2 billion) loss for the fiscal year through March 2010.