Moody’s Investor Services downgrades both Panasonic and Sony

Still bleeding red ink from huge losses last year in their television divisions, Sony and Panasonic have been downgraded by Moody’s Investor Services as they prepare to report anticipated dismal quarterly results.

Both companies had disastrous 2011 holiday sales seasons. They also face the impact of last year’s floods in Thailand, as well as continuing financial crises in Europe and with the yen.

Sony files its report on February 2 and is expected to barely break even for the final quarter, a period that is normally profitable. Thomson Reuters I/B/E/S polled six analysts who predict Sony’s operating profit to fall 94 percent to $114.3 million. That would be its worst third-quarter performance since the 2008 financial crisis.

Panasonic, which reports on February 3, is expected to see a 41 percent fall in quarterly operating profit. The company has been hurt by losses in its TV division, lower semiconductor earnings and weak performance from its Sanyo unit.

It would be Panasonic’s worst financial performance in a decade. The company is currently getting rid of overlapping businesses after buying out subsidiaries including Sanyo and accelerating the restructuring in its television division.

Japan’s TV manufacturers have fallen behind their South Korean competitors, hurt by unfavorable exchange rates and the failure to make needed investments.

“They have not made the right massive investments in panel manufacturing at the right time. If you do this half-heartedly, it ties your hands and has the opposite of the desired effect,” Nobuo Kurahashi, an analyst at Mizuho Investors Securities, told Reuters.

Last month, Sony ended its liquid-crystal display panel-making venture with Samsung Electronics. That allowed it find cheaper panels on the open market to try to keep pace with declines in TV prices. But those prices have continued to fall.

A 40-inch flat panel TV in Japan in December cost down nearly 40 percent less from a year earlier, according to research firm BCN. Shares in Sony have fallen by almost half since the beginning of the financial year, while Panasonic has decreased about 40 percent.