Apple Computer Inc has taken a hit from Moody’s Investors Service Inc, which lowered its long-term debt rating and confirmed the short-term rating on grounds of the growing dominance of Windows. Moody’s cut Apple’s senior unsecured long-term debt rating to Baa2 from Baa1 and shelf registration rating to (P)Baa2 from (P)Baa1. The short-term rating stays Prime-2. Moody’s said it took the action because of concerns that Apple’s longer-term market and business position will be challenged as the personal computer industry is increasingly dominated by Microsoft Corp’s Windows operating environment. The short-term rating remains unchanged because the company’s liquidity is strong and its cash balances are expected to stay high in the near term, Moody’s said. Apple’s operating results and financial profile have strengthened recently, and the 1995 outlook is strong, but the company is at a critical juncture during which its success will depend on how well it expands its customer base and the degree to which third-party software vendors support its products. It reckons Apple has only a limited amount of time to make good on its plan to license its operating system before future generations of Windows products further erode its perceived superiority; Apple’s near-term decisions about how to increase its market share will determine the company’s future ratings. The downgrade and affirmation complete the review of Apple’sratings that was started by Moody’s back in June.
Sony Corp has had the all-clear from Standard & Poor’s Corp, which affirmed its ratings of Sony Corp and three supported units and removed their ratings from negative CreditWatch. They were put on watch on November 17 after Sony announced its $2,650m write-off of goodwill associated with the 1989 acquisition of Columbia Pictures Entertainment Inc, now Sony Pictures Entertainment Inc. The affirmations assume the absence of additional costly restructuring measures at the picture business, and that its management steps will be sufficient to stem further significant losses, the agency said.Sony Corp’s senior debt remains rated A and its short-term debt A1, the ratings agency concluded.
