Sony's credit rating cut by S&P

Sony, reeling from four straight annual losses, had its credit rating lowered one level by Standard and Poor's because of concerns about an earnings recovery by the Japanese consumer-electronics maker.

The company's long-term ratings were lowered to BBB, S&P's second-lowest investment grade, from BBB+, the ratings company said in a statement today.

The outlook was set at negative, reflecting a view that ratings may be cut again in the absence of "solid signs of recovery" in Sony's credit quality within a year, S&P said.

Sony cut its annual profit forecast 33 per cent last month as it suffered from slowing demand and a strong yen.

A recovery in the earnings of Sony's main consumer-electronics businesses will remain slow, and there are downside risks in the businesses, S&P said.

It's the second downgrade for Sony this year by the S&P, which cut the Tokyo-based company's ratings in February one level from A-.

Moody's Investors Service on August 6 placed the company's credit ratings on review for downgrade, citing weaker demand and a stronger yen.

The maker of Cyber-shot cameras and Bravia TVs had its long-term rating already cut one level by Moody's in January.

Sony shares rose 0.2 per cent to close at 969 yen in Tokyo today, compared with a 0.3 per cent advance by the benchmark Nikkei 225 Stock Average.

Bloomberg