Print 9 comment(s) - last by Ramtech.. on Feb 10 at 8:42 AM

The rating agency's outlook on the company is negative

Standard & Poor's Ratings Services confirmed its unfavorable outlook on Sony's long-term corporate credit rating, and even dropped its long-term corporate credit and senior unsecured debt ratings on the Japanese company from "A-" to "BBB+."

According to Standard & Poor's Ratings Services, Sony has been downgraded because of decreased demand, heightened competition in Sony's mainstay businesses, and a "massive erosion of prices."

The rating agency further explained that Sony's TV business in particular has experienced losses since fiscal 2004, and that the unit expects a huge net loss in fiscal 2011 as well of ¥220 billion.

"Standard & Poor's believes the major reason for the extended losses is Sony's strategy to aggressively expand its global market share despite strong competition, a massive erosion of prices, and its high cost structure compared with overseas competitors," said Standard & Poor's Ratings Services in its report. "Massive pressure on the prices of Sony's key products, such as flat-panel TVs and mobile handsets, is likely to continue, and the company's position in the global market is under strong pressure amid severe competition from Korean manufacturers and emerging Chinese companies.

"In our view, an enhanced focus on profits, rather than on expanding sales, and efforts to lower costs are likely to reduce losses in its TV business. However, circumstances are so severe that Standard & Poor's believes it will be difficult for Sony to return its TV business to profitability even in fiscal 2013. Therefore, we see a low likelihood of a strong recovery in Sony's earnings in the next two years or so."

The rating agency added that Sony's profitability isn't looking great either compared to its competition due to consecutive net losses since 2008. Standard & Poor's Ratings Services predicts Sony's adjusted total debt total debt to capital will increase to about 40 percent March 31, 2012, up 5 percent from March 2010.

If Standard & Poor's Ratings Services sees no significant sign of recovery from Sony in six to 12 months, this overall rating could be lowered even further.

Sony had a tough year throughout 2011, with several cyber attacks launched against its PlayStation Network (PSN) database and Sony Online Entertainment (SOE) database as well as other units of the company like Sony BMG Greece.

As far as the TV business struggles go, Sony decided to negotiate a buyout of its 50 percent manufacturing stake in the LCD joint venture with Samsung.

Source: Reuters

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The walking dead
By Kosh_Naranek on 2/8/2012 1:43:44 PM , Rating: 2
"They are dieing
We should let them die"

RE: The walking dead
By inperfectdarkness on 2/10/2012 2:43:39 AM , Rating: 2
and here i've been downrated for suggesting that sony ditch stuff like the PS3 and narrow their focus to more core markets.

sony has a track record of trampling on consumer rights with DRM and crackdowns. they are not reaping what they've sown.

What does Sony excel at...?
By tayb on 2/8/2012 2:52:55 PM , Rating: 2
Seriously. I remember a time when Sony was THE brand. They were in every market and their products were rock solid. Sony sound system, DVD player, camera, television, laptop, and Playstation 2. You did well buying only Sony electronics.

Now? They replaced the PS2 with a $600 (and 1 year late) beast. Their TVs would be 4th or 5th on my list. I have no use for a point and shoot camera anymore. Their stereo equipment is too expensive. Their phones are horrible. Their laptops are overpriced and no longer quality.

A lot went wrong apparently.

RE: What does Sony excel at...?
By Ramtech on 2/10/2012 8:42:00 AM , Rating: 2
I worked in ODM company we manufactured TVs for Sony,Samsung... and i can confirm that guts of Sony Tvs were mostly same of those Samsung
None of us bought any Sony device afterwards

Forgot to add...
By JackBurton on 2/8/12, Rating: 0
RE: Forgot to add...
By Reclaimer77 on 2/8/2012 12:44:28 PM , Rating: 3
Now we can only hope Apple does too.

They always die in 3's..
By TileGuyJesse on 2/8/2012 12:27:34 PM , Rating: 3
Kodak, Sony, ???..

"You have paid the price for your lack of vision"
-The Emperor (Darth Sidious)

Just Sad
By Mitch101 on 2/8/2012 11:10:55 AM , Rating: 2
Sony used to be such high quality the products would outlive you. They should have kept AIWA as their cost competitive lineup instead they killed off AIWA and made SONY into garbage in a pretty case. I really want to love Sony products again but Ive since found love with LG, Samsung, and Epson and will be hard to win me back.

For readability's sake
By Devilpapaya on 2/8/2012 11:11:53 AM , Rating: 2
...since fiscal 2004, and that the unit expects a huge net loss in fiscal 2011 as well of ¥220 billion.

Should be....

...since fiscal 2004, and that the unit expects a huge loss of ¥220 billion in fiscal year 2011.

Minor errors are one thing, but I had to read that like 4 times before I understood what you were saying.

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