Credit rating agency Moody’s has
downgraded Sony’s debt rating to “junk” status based on “weak and volatile”
profitability expectations. Shares of Sony were down 3 percent in Asian markets
Monday and down almost 2 percent in early trading on the NYSE Monday.
Moody’s said Sony is facing intense
global competition and pricing pressure on TVs and personal computers. Moody’s
concluded that Sony would have difficulty sustaining profitability and expects
it to be volatile for some time.
In 2013, Sony shares rose 57% with
an upswing in the Japanese markets, even with investors acknowledging that the
company faces many competitive pressures from the likes of Microsoft and Apple.
The downgrade comes in the same
month that Nintendo warned investors that it was expecting an operating loss of
35 billion yen ($335.2 million) for the fiscal year ending in March, following
disappointing software and hardware sales in the busy end-of-year buying season.
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