4/16/2012 2:39:07 PM
Moody's warns Nokia faces tough challenges in fightback
Credit agency Moody's has cut Nokia's rating to one level above junk, claiming the challenges facing the Finnish manufacturer may not be easy to address.
Last week, Nokia issued a profit warning and said its financial results for the first half of 2012 would be 'disappointing'. In downgrading the credit rating today (16 April), Moody's said: 'Moody's believes that the structural challenges facing Nokia's Mobile Phones segment may not be easy to address, such as the market share gains recorded by makers of very low-end phones or new phone promotions by Chinese carriers.'
The credit agency said the strategy of moving sales away from its Symbian devices to Lumia smartphones was 'more challenging than expected' because feature phone sales were falling at a faster rate than smartphone sales were increasing.
Nokia is due to reveal its latest set of financial results this Thursday (19 April) and said in response to Moody's that its financial position 'remains strong'. Nokia executive VP and chief financial officer Timo Ihamuotila said: 'Nokia is quickly taking action. Nokia will continue to increase its focus on lowering the company's cost structure, improving cash flow and maintaining a strong financial position.'
Editor: Graeme Neill