Moody's Investors Service has placed its Aa3 long-term unsecured senior debt rating of Sony Corp. under review for possible downgrade due to the consumer electronics giant's weak earnings outlook for fiscal 2003.
The credit-rating agency said Thursday the action "reflects Moody's concern that Sony may take longer than expected to regain the strong profit and cash flow generation patterns seen before."
Although Sony's overall profitability improved during the year that ended March 31 over the previous year, its core electronics products segment "did not show significant recovery, despite the restructuring measures of the past few years," Moody's said.
That segment "may continue to suffer from weak profitability in the short to intermediate term because deflationary pressures on its electronics products will remain strong," the ratings agency added.
Moody's said its latest action does not affect Sony's Prime-1 short-term rating.
Sony's weak earnings outlook, which coincided with the April 24 release of its earnings report, disappointed investors and caused the Tokyo stock market's key index to fall to a new 20-year low.