Fitch downgrades electronics makers Sony and PanasonicSony and Panasonic, the Japanese electronics makers reeling from record losses, had their long-term credit ratings downgraded to junk yesterday by Fitch Ratings, citing weak recovery in the TV market.
Sony’s rating was cut by three levels to BB-, three steps below investment grade, with a negative outlook, Fitch said in a statement today.
Panasonic’s was lowered two levels to BB, also with a negative outlook, the ratings company said in a separate statement. Both companies had their short-term ratings reduced to B from F3.
The companies will struggle amid a strong yen and weakened economic conditions in Japan and overseas, Fitch said. Japan’s two largest TV makers and smaller rival Sharp are suffering from weakening demand and increasing competition with Samsung Electronics and Apple.
“Meaningful recovery will be slow given the company’s loss of technology leadership in key products,” Fitch said of Sony. Panasonic’s downgrade reflects reduced competitiveness and weak cash generation, the ratings company said.