S&P Issues First Ever Credit Rating Downgrade on Nokia (NOK)
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For the first time ever, Standard & Poor's on Wednesday cut its debt rating on Nokia Corp. (NYSE: NOK), citing further market share loss and weaker operating margins going forward.
The world's largest maker of mobile phones had its long-term rating lowered one notch to "A-" with a Stable outlook by S&P. The Finnish company has been rated at "A" since 1998, which is the sixth-highest of 10 investment ratings.
Nokia had roughly 5.3 billion euros ($7.5 billion) in long-term debt at the end of 2010.
"The downgrade reflects the revision of our business risk profile assessment on Nokia to ‘satisfactory’ from ‘strong,’ primarily because we expect that Nokia’s smartphone portfolio will make further significant market share losses during 2011
and 2012 until it has completed its adoption of Microsoft’s (NASDAQ: MSFT) Windows Phone software as its new primary software platform for smartphones," S&P said.
Shares of Nokia are down 5 cents to $8.63 in premarket trade Wednesday.
The world's largest maker of mobile phones had its long-term rating lowered one notch to "A-" with a Stable outlook by S&P. The Finnish company has been rated at "A" since 1998, which is the sixth-highest of 10 investment ratings.
Nokia had roughly 5.3 billion euros ($7.5 billion) in long-term debt at the end of 2010.
"The downgrade reflects the revision of our business risk profile assessment on Nokia to ‘satisfactory’ from ‘strong,’ primarily because we expect that Nokia’s smartphone portfolio will make further significant market share losses during 2011
and 2012 until it has completed its adoption of Microsoft’s (NASDAQ: MSFT) Windows Phone software as its new primary software platform for smartphones," S&P said.
Shares of Nokia are down 5 cents to $8.63 in premarket trade Wednesday.
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