Moody's downgrades Sony

The Pak Banker - - Front Page -

HONG KONG

Global rat­ing agency Moody's has down­graded the is­suer and long-term se­nior un­se­cured bond rat­ings of Sony Cor­po­ra­tion to Baa3 from Baa2. At the same time, Moody's has down­graded the short-term rat­ings of Sony and its sup­ported sub­sidiary, Sony Global Trea­sury Ser­vices Plc., to Prime-3 from Prime-2. The rat­ings out­look is neg­a­tive. The rat­ing ac­tions re­flect Moody's con­cern that an in­creas­ingly rapid de­te­ri­o­ra­tion in de­mand in the dig­i­tal AV mar­ket due to slug­gish eco­nomic con­di­tions and fast struc­tural changes will weigh more heav­ily on Sony's earn­ing than pre­vi­ously expected. The struc­tural changes in­clude the mat­u­ra­tion of ma­jor dig­i­tal AV prod­ucts, such as flat panel dis­play (FPD) TVs, the grow­ing use of smart­phones, and the can­ni­bal­iza­tion of de­mand for low-end por­ta­ble dig­i­tal prod­ucts, in­clud­ing com­pact dig­i­tal cam­eras. Oper­at­ing losses in its TV busi­ness -which ac­counted for 11% of non-fi­nan­cial ser­vices rev­enue in 1H2012 -- are likely to continue pres­sur­ing over­all earn­ings. The com­pany ex­pects an oper­at­ing loss of JPY80 bil­lion in FYE03/2013 and then breakeven in FYE03/2014.

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