Fitch cuts Nokia credit rating to junk, gives negative outlook

Fitch cuts Nokia credit rating to junk, gives negative outlook
Nokia’s disappointing financial results for the first quarter of 2012 were the tipping point for credit agencies. After Moody’s downgrade, now Fitch downgraded Nokia’s credit rating to junk and maintained a negative outlook citing shrinking market share as the reason.

Fitch cut Nokia’s rating to BB+, down from BBB-, and mentioned it could further downgrade the company if it doesn’t show improvement in the second half of 2012 and through 2013.

"Given the potential headwinds facing the company, Fitch is currently not convinced that Nokia can attain this over the course of 18 months," the agency explained in a statement.

Nokia has seen unprecedented drop in marketshare and continues burning its cash reserves over a year after it announced it will adopt Microsoft’s Windows Phone as its main platform. After dominating the handset market for nearly 14 years, this quarter Nokia gave away its number one position to Korean Samsung. The company’s cash reserves dropped to nearly $6.5 billion (4.9 billion euro) at the end of March 2012.

Nokia responded swiftly to Fitch’s downgrade by hinting future layoffs and other drastic measures may be needed:

"Nokia will continue to increase its focus on lowering the company's cost structure, improving cash flow and maintaining a strong financial position," Espoo’s Chief Financial Officer Timo Ihamuotila said.

At the same time, the lower rating raises the cost of insuring Nokia against defaulting on its debt. The Finnish company expects similar or worse next quarter, and provides no guidance for the second half of the year.

source: Bloomberg



27. Mobile-X-Pert

Posts: 565; Member since: Dec 20, 2010

Why can't people understand that the more OSs available the better choices we have. Can you imagine a world where you can only choose between iOS/Android? The more competition the more benefits we get.

28. medicci37

Posts: 1361; Member since: Nov 19, 2011

Widows will still be around. As for Nokia, im not so sure. If Nokia does go bankrupt, it's their own fault for putting themselves in this situation.

29. lubba

Posts: 1313; Member since: Jan 17, 2011

Nokia will still be around. You can be sure of that. Just like Skype is still Skype. Right now the naysayers, skeptics, backstabbers, and trolls and all are in denial because they couldn't get their way. Just like a child, they'll say this and do that. One more thing, there maybe is a fear Nokia that is stepping into someone else's territory and these guys can't have that. While huge momentum is going for NL900, this Fitch ass has to come out and do this. Timing.

25. ron1niro

Posts: 54; Member since: Mar 28, 2012

Stupid people. Nokia adopting android is the worst thing that can happen to technology. So they should also start making plastic phones with multiple cores that still lag? Who said these figures represent windows phone sales? Windows phones have been selling pretty well,it's symbian sales that have slowed down which is understandable because the company is trying to shift to another platform.

21. steelicon

Posts: 318; Member since: Apr 02, 2011

Paging Truth Police: One Last Time - the Reality of Nokia when CEO Elop Took Charge as CEO, and What Was Not Broken These Steps or Nokia is No More - the way back to profits and growth (updated)

16. droiddomination

Posts: 203; Member since: Dec 01, 2011

adopt Android nokia, or suffer bb fate! so simple.

22. jamrockjones

Posts: 345; Member since: Oct 26, 2011

It's true! But they're too stubborn.

15. medicci37

Posts: 1361; Member since: Nov 19, 2011

After reading these comments, I am starting to wonder if Nokia's biggest market share is Crazy People. You guys make ifans look good. lol

13. shy2papa

Posts: 336; Member since: Jan 23, 2010

This is just my opinion but i think step elop is a MS Trojan in Nokia meant to destroy Nokia so MS can buy it and use it against Google and Google's android and Apple's iOS Just my opinion, but what will go wrong if Nokia adopts Android and have other options instead of putting all its eggs into MS W7, its common sense to have a backup plan and Nokia has none so sad.

19. eaxvac

Posts: 328; Member since: Jan 15, 2012

you are the trojan saying s**t.

12. lubba

Posts: 1313; Member since: Jan 17, 2011

Problem is Apollo is a longs ways to go yet. There is no way the lumia 800 and 900 can keep the momentum going that long. Plus in the USA the Lumia 900 is only selling on ATT which doesn't do Nokia any good unless its sold on multiple carriers. The next 2 quarters going to be tough for Nokia. that can be Blamed on MS.

11. darktranquillity

Posts: 285; Member since: Feb 28, 2012

I dono where i'm going but i like the direction

10. pongkie

Posts: 663; Member since: Aug 20, 2011

fitch base their rating on the money they get from companies. they are one of the reason and responsible why this whole financial crisis we are now. If nokia is junk, fitch is a filthy scum that even germs wouldn't touch

33. SuperEd

Posts: 132; Member since: Oct 18, 2011

Yup! You got that right! Fitch has as much credibility in this market as Abercromby &Fitch!!!!!!

9. mercorp

Posts: 1045; Member since: Jan 28, 2012


26. bbblader

Posts: 590; Member since: Oct 24, 2011

I'm sorry I'm not hating but it will be slower than a snail! you'll need quad-core just to power the camera and 2 more cores just to be perfect

8. bbblader

Posts: 590; Member since: Oct 24, 2011

you think it's junk? tell me how samsung apple and htc make prize contests more than 5 times a year and just give you a T-shirt and a sport backpack just for answering people's questions on Facebook?

7. MickDM

Posts: 63; Member since: Nov 29, 2011

i think vh spreads negative news in an effort to hurt nokia/ms/wp/vzw...just my opinion :)

6. groupsacc

Posts: 232; Member since: Feb 28, 2012

Symbian. Meego. Microsoft alliance. I just cannot understand their stubbornness. I seriously believe that they can make a come back by focusing on their home-European market, by releasing Android-based phones designed to cater for the European taste.

18. eaxvac

Posts: 328; Member since: Jan 15, 2012

not everyone wants a laggy, fragmentated phone like you.

31. Forsaken77

Posts: 553; Member since: Jun 09, 2011

You just don't get it, do you?!! Nokia is circling the drain right now. By them (Nokia) having an exclusive deal with Microsoft and Windows Phone, they are severely limiting themselves when they need to be able to reach as many people as possible. Not to mention that Windows Phones sell like dirt here in the U.S.. Microsoft can't give the damn things away and it doesn't help that customers are referred to either iOS or Android by store reps. We're not saying for Nokia to abandon your precious WP7 OS. We're just saying that if they made Android phones as well, they'd actually make some decent money because android phones sell a hundred times better than WP models. WP7 is soo far behind in what hardware it uses and the features that it offers and it's the single reason why Nokia is going down the drain. Nokia is stuck making phones on an OS that is so 3 years ago. If Nokia made a Lumia 900 on Android with a dual core 1.5 ghz processor and 1gb of RAM, they'd sell millions and they'd be on their way back to the top!!! Nokia would have an opportunity to shine on android. Instead of us waiting for the Galaxy S3, we would be waiting for the Lumia 2000 as Androids top model. The sky's the limit for hardware on Android, and that's what brings people to it. WP hardware is equivalent to low end Android phones even though they run much better than low end Androids. But that's how customers see it. They compare and Android with a 1.5ghz quad core and a gb of RAM with 1080p large hd screens to a WP single core 800 mhz with half a gig of RAM on a sub-par, 4 inch screen. Even uneducated people will see there's no comparison there. I like Microsoft products myself. I love my Xbox 360 and I believe they will eventually catch up in 5-10 years. Unfortunately, Nokia doesn't have that long and they're losing buckets of money on a daily basis.

36. steelicon

Posts: 318; Member since: Apr 02, 2011


5. Mobile-X-Pert

Posts: 565; Member since: Dec 20, 2010


4. Mobile-X-Pert

Posts: 565; Member since: Dec 20, 2010

To be honets, I'm tired of seeng all this bad news about Nokia.

3. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

I can't imagine the recent news/rumor that MS was not going to support current WP7.X handsets with WP8 helped, either. Given that MS has not repudiated the story, it tends to become factual. Not even Apple plays the product obsolescence game that hard.

1. FoneAddict

Posts: 263; Member since: Jul 05, 2011

So sad to see a once great Mobile Phone company be reduced to Junk status. Truly sad. Consumers are simply not convinced by the Microsoft partnership. I just hope Nokia understands this before it's too late.

2. eaxvac

Posts: 328; Member since: Jan 15, 2012

i just love this, its stocks went down to 4.8 USD that day and I bought almost 1500 shares out of it. Quite a great deal, but of course it does have its own risk.


Posts: 4851; Member since: Apr 13, 2012

SSTEPHEN EFLOP THE SKUM Is taking Nokia down... Since he took over The betrayal bribe bstrd!

17. eaxvac

Posts: 328; Member since: Jan 15, 2012

lmao, your name says it all.

20. steelicon

Posts: 318; Member since: Apr 02, 2011

Save your own company, Nokia! Save all of these people's jobs! There is only one layoff necessary, and that's Stephen Elop.

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