Samsung surges while Panasonic and Sony are slouching.
The South Korean electronics giant continues to surge, posting a significant increase in market cap during the past few days while Japanese electronic firms Panasonic and Sony got downgraded credit ratings. Fitch, the rating agency, gave Sony and Panasonic a junk status as it doubted the ability of the two to make profits amidst the rising competition. While Samsung continues to increase profits, pushing its stock up to 36 percent for 2012, around $195 billion market value in total.
Fitch downgraded the ratings of Panasonic and Sony on Thursday, and Reuters reported such next day. While two other major rating agencies S&P and Moody ranked them above the junk status.
According to Fitch, Panasonic is a bit better than Sony as it still has an advantage of a quite stable business in appliance which is generating positive margins; while Sony’s electronic businesses are in the red, thus, it appears overstretched.
Panasonic anticipates to lose $10 billion in 2012 to March 31 while Sony forecasts a year profit of $1.63 billion though it is an inflated figure because of the sale of its chemical business. According to analysts, the decline of Sony and Panasonic can be Samsung’s benefit, which has taken a strong position in the electronics industry. Bloomberg notes that Fitch rated Samsung an A+, along with a stable forecast.
The rise of the South Korean firm has been credited largely to the success of its smartphones which are powered by Android. Its mobile division does better in profits than Google, the developer of Android OS.