Sony’s credit rating heads toward junk pile
Japan’s electronics sector is reeling, gov’t minister says no bailout is coming.
by Cyrus Farivar
Nov 9 2012
Just over a week ago, we reported that Sharp, one of Japan’s biggest electronics firms, may be set to go under. We also noted how other Japanese tech mega-corporations, including Panasonic and Sony, aren’t doing too well either. After Sharp posted its most recent loss, its financial rating fell to junk status, and the company is now seeking a government bailout. Panasonic was also hit with a near-junk rating by Fitch earlier this month, after it posted a loss 30 times larger than analysts had estimated.
Now, Sony—the biggest of Japan’s big dogs—can’t escape the bad news either. On Friday, Moody’s downgraded Sony’s long-term debt rating from Baa2 to Baa3, one notch above junk status. This marks the second time in a month Sony has been hit with a downgrade.
“Without robust restructuring in the coming 12 to 18 months, Sony’s non-financial services businesses will at best achieve roughly break even, and are also at risk of remaining unprofitable,” the rating agency said in its report.