Digital Spy

Search Digital Spy
2

Tech News

Sony, Panasonic stripped of investment-grade ratings

By
Sony and Panasonic have been stripped of investment-grade ratings by an influential credit agency due to recent financial troubles.

Fitch downgraded both companies from BBB- to BB-, or 'junk' status as it is otherwise known, The Financial Times reports.

Kaz Hirai, Executive Deputy President of Sony Corporation

© Sony

Demonstration of Sony's new 84-inch 4K TV (Bravia KD-84X9005)














"This wasn't an easy decision," said Matt Jamieson, head of corporate research with Fitch. "But their reputations have been hit so much that it'll take a long while to crawl back."

Sony's financial woes stem primarily from its struggling television business and the strong Japanese yen. Fitch noted that if the company manages to curb decline in the sector, further downgrades will not be necessary.

President Kaz Hirai has introduced extensive cost-cutting measures, with thousands of employees due to be laid off by April next year, but analysts believe both firms will pull through eventually.

"I don't think the banks will push either of these companies to the wall," said Damian Thong, an equity analyst at Macquarie Securities in Tokyo. "But they do need to convince people that tough restructuring moves will be done in good time, while minimising unnecessary damage to healthy businesses."

Sony's gaming empire also saw a decline this year, particularly in the handheld sector, with annual sales expectations for the PSP and Vita lowered by 2 million in a recent financial report.

You May Like

Comments

Loading...