After estimating that Sony's weak earnings are only going to get worse, finance company Standard and Poor's downgraded Sony's corporate credit rating to A- for long term borrowing and A-2 for short term loans.
"The CreditWatch listing is based on our view that the likelihood of Sony's weak earnings persisting has increased as there are no signs of a halt to the deterioration in the earnings of the company's core flat panel TV business," Standard and Poor's said in an official statement.
"In addition, Sony's financial burden is likely to increase in tandem with the company's making Sony Ericsson a wholly owned subsidiary. Taking these factors into consideration, we have concluded that we need to review the prospects for Sony's operating and financial performance and verify the effects on the rating."
Sony's business division responsible for both flat-panel TVs and PlayStation has reported a net loss of $449 million in its most recent financial report. This was the third consecutive year in the red for the company, with at least one more year of losses expected.
"Standard & Poor's will resolve the CreditWatch listing after meeting with Sony management and verifying the prospects for an earnings recovery in the company's mainstay electronics business and improvement in its financial soundness for the next few years," the company's statement concluded.
