Moody’s lowers Sumitomo

Moody’s Investors Service said it downgraded Sumitomo Corp.’s issuer and senior unsecured ratings, as well as its supported subsidiaries’ senior unsecured ratings, to Baa1 from A3.

The agency also said it changed the company’s outlook to negative from stable.

Moody’s also affirmed Sumitomo’s and subsidiaries’ short-term ratings at prime-2.

The downgrades were prompted by news of Sumitomo’s downward earnings revisions due to large impairment losses on its third-quarter financial results, Moody’s said.

The results, which were significantly weaker than expected, heightened concerns about the company’s ability to generate adequate and sustainable earnings appropriate for its previous rating level, the agency said.

The downgrade also considers Sumitomo’s track record of heightened earnings volatility, combined with mounting high leverage, Moody’s added.

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