Nokia responds to Moody’s downgrade

Nokia responds to Moody’s downgrade
Earlier today, Moody’s downgraded Nokia’s credit rating from a Baa2 to a Baa3. The ratings agency said that this action is in response to Stephen Elop describing Nokia’s Q1 sales as “disappointing”. Moody’s released a statement saying,

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.

Nokia is set to report its first quarter earnings on April 19, 2012, but has fired off a statement in response to its downgrade.

Nokia maintains that its financial position remains strong. It claims that as of March 31, 2012, it had a gross cash balance of EUR 9.8 billion, and a net cash position of EUR 4.9 billion.

Cash conservation remains a priority for Nokia in the current transition. We are making progress with our previously announced targets to reduce non-IFRS operating expenses by more than EUR 1 billion in Devices & Services, and to reduce non-IFRS operating expenses and production overheads by EUR 1 billion in Nokia Siemens Networks,” said the Finnish manufacturer in a statement today.

Timo Ihamuotila, Executive Vice President and CFO at Nokia also reiterated the company’s position by saying, “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.

source: Nokia

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