Standard and Poor's downgrades Nokia on slow sales

Standard and Poor's downgrades Nokia on slow sales
After Moody's and Fitch, Standard and Poor's is the next rating agency to downgrade Nokia's long-term outlook due to a host of factors including disappointing quarterly results, dim prospects for Symbian smartphone sales and increasing competition in feature phones. Nokia now has a long-term credit rating of BBB, down from BBB+, but has managed to keep its short-term rating at A-2.

“The rating actions reflect the continued erosion of Nokia’s smartphone market shares and a downward revision of our base-case assessment for the operating margins of Nokia’s Devices & Services segment until Nokia has completed the adoption of Microsoft’s Windows Phone as its new primary software platform for smartphones,” Matthias Raab, an analyst at S&P, said in a statement.

What's more the agency may downgrade Nokia even further if it doesn't see any improvement in the mobile phone division in the next six to nine months.

The lower credit rating will make it harder for the Finns to run their business as it directly affects interest rates which will be higher for the company. The rating agency now expects Espoo's operating margins in the low/mid single digits in both 2011 and next year, but it reiterated its expectations that the company will bounce back with Windows Phone, albeit only in 2013. Actually, the analysts expect the Finns to recover to 2010 levels in 2013.

A week after the company reported its financial results for the second quarter, Moody's downgraded Nokia to Baa2, a rating just two notches above “junk” status, but it also left its outlook negative. Ratings agency Fitch has also grown more skeptical on the short and long term ratings of the phone maker changing its outlook to negative.

source: S&P

FEATURED VIDEO

7 Comments

1. isitWORTHit unregistered

when was the last time Nokia made a worthwhile phone? I can't remember...

4. snowgator

Posts: 3621; Member since: Jan 19, 2011

Right now, I would soooo jump on Nokia stock. If I had money, of course. Despite THAT little detail, I would buy stock.....

5. PeterIfromsweden

Posts: 1230; Member since: Aug 03, 2011

This is not good for Nokia ! By the way, this is my first post : )

6. The_Miz

Posts: 1496; Member since: Apr 06, 2011

I would care, but Nokia makes crap products.

9. snowgator

Posts: 3621; Member since: Jan 19, 2011

And your last Nokia device was..... ??????

7. Mobile-X-Pert

Posts: 565; Member since: Dec 20, 2010

This is the only website where this news has been posted

8. SuperAndroidEvo

Posts: 4888; Member since: Apr 15, 2011

I really believe that with Windows Phone 7 OS onboard with Nokia's excellent phones, the company WILL rebound. I STILL think WP7 OS is a dark horse & will get very popular VERY soon. Every time I play with WP7 OS I come out very impressed. When the Mango update finally hits, WP7 will get 500 new features. That is going to make a Nokia phone with WP7 OS even more compelling. I have a great feeling about this partnership & snowgator is right, now would be a GREAT time to buy some Nokia stock for sure! Everyone knows the best camera phones come from Nokia, & now they will have a great upstart new OS to go with it, Nokia will rebound for sure! (Well I hope so!) lol

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.