Moody's Japan K.K. has downgraded the credit rating of Sony Corp. to junk status of Ba1 from Baa3 due to weak television and personal computer business outlooks.
"Sony's profitability is likely to remain weak and volatile," the rating agency said in a statement, adding the majority of its core consumer electronics businesses is expected "to continue to face significant downward earnings pressure."
The ratings agency attributed the company's weak business performances in the electronics sector to intense competition and shrinkage in demand caused in part by the rapid penetration of smartphones.
Although Moody's acknowledged that Sony has made progress in its restructuring measures including the consolidation of its manufacturing plants, it added that the benefits are only slowly emerging.
Amid sluggish sales and fierce price competition in televisions, cameras and personal computers, the company in October revised downward its full-year earnings forecasts for fiscal 2013 through March.
Original headline: Moody's cut Sony's rating to junk status amid sluggish TV business
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