S&P said that it sees only a moderate recovery in Sony’s earnings and profitability due to more intense competition in the smartphone, gaming and digital imaging businesses, areas that are strategically important to Sony. The ratings agency also expects further downside risks to Sony as a result of the intense competition.
Sony has taken steps to become more competitive, reducing costs, restructuring its business and releasing new products like its very successful PlayStation 4. The issue is that the turnaround is taking longer than S&P expected. The ratings agency expects EBITDA margin for fiscal year 2013 ending in March to be 4.8% and to rise only to 5% in 2014 and beyond. Here is the salient point from the ratings notice:
Weak profitability and higher volatility in profitability are the largest constraints on the business risk profile, in our view.
S&P expects Sony’s debt levels to remain high, but the agency expects an improvement of Sony’s debt-to-EBITDA from its current 4.3 times to the mid-3-times range in the current fiscal year, with only modest improvement after that.
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
