S&P cuts Nokia's credit rating to "BB+"

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S&P cuts Nokia's credit rating to
Standard & Poor's on Friday downgraded the corporate credit rating of Finnish handset maker Nokia, citing lower revenue expectations.

Standard & Poor's Ratings Services has cut Nokia's corporate credit rating 'BB+' from 'BBB-'. The latest rating is considered highest speculative grade by market participants.

Earlier this week, rating agency Fitch too had slashed Nokia's credit rating.

The downgrades come at a time when Nokia -- once the dominant player in mobile handset space - is battling stiff competition from players such as Apple and Samsung.

S&P also has a negative rating outlook for Nokia, indicating the possibility of a downgrade in the next 12 months, if the company fails to stabilise revenues and margins and significantly cut cash losses.

"The rating action reflects a downward revision of our expectations for revenues from Nokia's Devices and Services division in 2012 and a subsequent revision of our profitability and cash flow assumptions," S&P said in a statement.

Nokia's strong position in this segment could weaken further, especially in China and India, where demand has been significant for low-price smartphone-like devices, a segment where Nokia currently lacks competitiveness, it said.the same extent as in 2011.

"We still expect revenue from Lumia smartphones to grow over time but not sufficiently to offset a rapid decline in revenue from Symbian-based smartphones over the next few quarters," it added.

PTI

Story first published: Saturday, April 28, 2012, 13:09 [IST]
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