S&P cuts Sony credit rating one notch to BBB-, outlook negative

TOKYO Fri Feb 14, 2014 6:13am EST

TOKYO Feb 14 (Reuters) - Standard & Poor's cut its long-term credit rating on Sony Corp one notch to BBB-, just above junk status, citing the electronics division's declining competitiveness in an increasingly competitive industry and a slower-than-expected recovery in profitability.

The outlook for the rating is negative.

Last month, Moody's Investors Service cut its debt rating on Sony to junk, following a similar move by Fitch more than a year earlier, as Sony's TV and PC operations faced especially daunting challenges.

Sony earlier this month announced it would sell off its PC business and put its TV operations into a separate unit, while forecasting a 110 billion yen ($1.08 billion) net loss for the year to end-March.

"Even taking into consideration the additional structural reforms, S&P believes it will be difficult for the company to significantly improve its profitability," the ratings agency said.

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