S&P: Sony outlook negative

Standard & Poor's said it revised to negative from stable its outlook on the long-term corporate credit ratings of Sony Corp. (A-/A-2) and its overseas financial subsidiaries, Sony Capital Corp. (A-/A-2) and Sony Global Treasury Services plc.

The agency said the outlook revisions reflect the rapid deterioration in profitability of the company's core electronics segment, which was negatively affected by the rapid and widespread deterioration in major global economic markets.

Sony plans to restore the profitability of its electronics segment through a review of its investment plans and the restructuring of its LCD TV operations by consolidating manufacturing sites and reducing its workforce, and the company will pursue additional measures to reduce costs in other businesses such as its game and pictures segments. But given the increasingly difficult operating environment and rapid deterioration of the global consumer electronics market, S&P said it is not overly optimistic about Sony's profit recovery prospects for the fiscal year ending March 31, 2010.

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