It’s Moody again: Nokia which last week only reported a huge loss of $1 billion, today sees its rating downgraded by none other than Moody’s Investors Services. Moody had downgraded the long-term senior unsecured ratings of Nokia to Ba3 from Ba1. The short-term senior unsecured ratings of Not-Prime were affirmed. The outlook on all ratings remains negative.
Here is what Wolfgang Draack, a Moody’s Senior Vice President and lead analyst for Nokia said:
“Today’s rating action reflects our view that Nokia’s transition in the smartphone business will cause deeper operating losses and consequently cash consumption in the coming quarters than we had previously assumed,” says Wolfgang Draack, a Moody’s Senior Vice President and lead analyst for Nokia. “A return to profitability in the Devices & Services (D&S) segment on the back of smartphones with the Windows Phone 8 mobile operating systems is by no means assured,” Mr Draack continues.
Soon after Timo Ihamuotila, Nokia’s Executive Vice President and CFO commented on ratings:
“While we are disappointed with Moody’s decision, its impact on the company is limited. We are quickly taking action to position Nokia for future growth and success. Nokia will continue to focus on lowering the company’s cost structure rapidly, improving cash flow and maintaining a strong financial position.”