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Nokia sees third credit rating cut in a row, S&P says junk

updated 10:35 am EDT, Fri April 27, 2012

Standard and Poor compounds Nokia issues

Nokia faced its third credit rating cut in a month on Friday in signs of a further confidence problem. Standard & Poor dropped Nokia's rating to junk status based on a shortfall in cash strength. While its existing cash was a "positive factor," the firm said, it expected the phone designer's cash to drop from a predicted 4.9 billion euros ($6.5 billion) to no more than four million euros ($5.3 billion).

S&P wasn't certain that Nokia's strategy so far with Windows Phones like the Lumia 800.

As it has in the past, Nokia issued a statement immediately defending the company's financial state. The firm was in the "middle of a transformation program" where it was not just transitioning its phone platform but trimming costs and developing a better cash base, CFO Timo Ihamuotila said.

The ratings cut still followed similar views from Fitch and Moody's and have created an overall consensus that Nokia is no longer the financially secure giant it was during the 2000s. While some of the blame has been pinned on CEO Stephen Elop for too quickly deprecating Symbian, the decline has more commonly been pinned on years of Nokia dismissing outside threats and only gradually adopting features like touch that Apple and Google embraced almost immediately.

Nokia's hopes are primarily centered around strong US sales for the Lumia 900 as well as reclaiming the low-end smartphone space through the Lumia 610.

by MacNN Staff



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