Barely two weeks after Sony ($SNE) solidified plans to expand its medical device and equipment business, Moody's Investor Service lowered its credit rating by a notch. As Bloomberg reports, the move could ultimately make it harder for the Japanese consumer electronics giant to reduce massive debt and recover from four annual losses in a row.
The thing is, Moody's decision could ironically make Sony's efforts to improve its finances even harder. Bloomberg reports that Moody's slashed the company's credit rating because it sees weak consumer demand, global competition and a strong yen as major obstacles to the company's rebound plans. Those factors alone led to Sony slashing its annual profit forecast by 33% on Aug. 2. And now the company's Moody's rating is down to Baa2, the second-lowest in the investment grade category, affecting about $4.2 billion in debt, according to the Bloomberg story.
And so it goes for Sony in the two weeks or so since the company agreed to invest $645 million into endoscope and camera maker Olympus ($OCPNY), and also partner with the company to make new endoscopes and other medical devices. Earlier this month, reports began to surface that investors aren't happy with Sony's new focus on med tech. The worry: That Sony is wasting vital cash by investing in medical equipment and other new sectors in the face of fast-rising debt.
- read the Bloomberg story