Fitch cuts Sony, Panasonic credit rating to 'junk'

Fitch cuts Sony, Panasonic credit rating to 'junk'
Fitch, one of the world’s three biggest credit rating agencies, has just downgraded Sony and Panasonic’s stock to ‘junk’ status.

The two Japanese manufacturers are downgraded in different press releases with different reasons, so let’s take a look at each separately.

Sony in particular is downgraded due to a weakness in home entertainment and mobile products, and despite a recent improvement in devices including smartphones. Sony’s traditional strengths like TVs and cameras however have a steady downward momentum.

"Fitch believes that continuing weakness in the home entertainment and sound and mobile products and communications segments will offset the relatively stable music and pictures segments and improvement in the devices segment which makes semiconductors and components," Fitch said.

The downgrade for Sony is big, by three notches, down from BB- to BBB- and will make Sony’s financial and credit operations costlier.

Sony however is undergoing a transition under new chief executive Kaz Hirai, and in terms of smartphones at least we are seeing some improvement.

Panasonic on the other hand has tried to come back with smartphones in Western markets in the recent past with devices like the Eluga, but has now killed that effort as competition mounts up.

source: Reuters

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12 Comments

1. XPERIA-KNIGHT unregistered

we dont need your approval fitch.....

2. darac

Posts: 2156; Member since: Oct 17, 2011

This reflects the state of Japan really. The country is going through collective apathy.

3. lubba

Posts: 1313; Member since: Jan 17, 2011

Panasonic will die off slowly than Sony. These two companies and others alike are moving too slow. They won't change with the times. That's their downfall.

4. cripton805

Posts: 1485; Member since: Mar 18, 2012

I was just thinking about this right before this article. Sony needs to innovate on a more.creative productive level. They tend to innovate on propriatary things to Sony and costly mass production... Cough cough. PS3 processor 7 SPEs, Mini discs, UMDs, memory chips, etc... I think Blu Ray was Sony? At least they did one right thing... Sort of... If you're smart, you'll know why.

7. Atlas

Posts: 158; Member since: Apr 15, 2012

I think they also helped with making the CD and produced the first colour phone (SE).

10. cripton805

Posts: 1485; Member since: Mar 18, 2012

Please read the comment again. There's a couple key words that you missed.

5. mercorp

Posts: 1045; Member since: Jan 28, 2012

Please release the yuga and ondin soon!!

6. ryq24

Posts: 875; Member since: Oct 17, 2011

of the two, sony have a better chance of bouncing back but they will never be number 1 again. koreans and chinese companies will rule the world one day if not already.

8. Jyakotu

Posts: 867; Member since: Dec 12, 2008

Sony has a much larger portfolio than Panasonic does, so in all honesty, they can always come back. PlayStation is still huge, plus they have laptops, TVs, Walkman, headphones, smartphones, etc. The list goes on.

9. jsdechavez

Posts: 791; Member since: Jul 20, 2012

Sony will definitely make a comeback..

11. daniel_bargs

Posts: 325; Member since: Nov 27, 2010

if only they price their products parallel to the competition. Sony has $400 netbook while asus has $250 with exactly the same specs!

12. oister85

Posts: 508; Member since: Apr 27, 2012

I like both companies I hope the best for them

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