Nokia credit now labeled junk by all three major credit-rating agencies
Investment company Moody's became the last of the big-three credit-rating firms to downgrade Nokia to junk status on Friday, serving the Finnish phone maker yet another blow as it struggles to survive amidst a surging smartphone market.
Nokia's credit rating downgrade is the second such negative decision from Moody's in the past three months and comes one day after the communications company announced it would be cutting 10,000 jobs by the end of 2013 in cost-saving efforts, reports Bloomberg.
The world's former number one handset maker now holds a rating of Ba1, the highest non-investment grade, with a negative outlook Moody's said. In April Standard & Poor's and Fitch Ratings cut Nokia's standing and both have dismal outlooks for the company as revenue slips amid ongoing restructuring.
"[Nokia's plan] delineates a scale of earnings pressure and cash consumption that is larger than we had previously assumed,? said Wolfgang Draack, a senior vice president at Moody?s. As part of the restructuring effort the company expects to lose some 1.25 million euros, or about $1.58 million US, through the end of 2013.
Despite being a major player in Microsoft's new Windows Phone platform initiative, which some analysts believe will hold more market share than Apple's iPhone by 2016, Nokia saw smartphone shipments drop 60 percent year-on-year in the first quarter of 2012 while cheaper feature phone sales took a 16 percent hit during the same period. Overall, Nokia posted a loss of some $1.7 billion in quarter one with most of the steep decline blamed on the switch away from Symbian to Windows Phone. It was reported that the company actually made more money on a patent licensing settlement from Apple than it did selling the Lumia Windows Phone.
Nokia's Lumia 900 Windows Phone.
Moving into 2012, CEO Stephen Elop warned that second quarter losses would be higher than expected and may be equally unfavorable in the quarter three. In a statement on Friday, Fitch analysts said that Nokia is looking at a "precarious combination of a depleted cash balance, without an end in sight to the declining cash flows."
Nokia stock fell 18 percent on Thursday after the dismal forecast was announced and has yet to regain any real footing.
Nokia's credit rating downgrade is the second such negative decision from Moody's in the past three months and comes one day after the communications company announced it would be cutting 10,000 jobs by the end of 2013 in cost-saving efforts, reports Bloomberg.
The world's former number one handset maker now holds a rating of Ba1, the highest non-investment grade, with a negative outlook Moody's said. In April Standard & Poor's and Fitch Ratings cut Nokia's standing and both have dismal outlooks for the company as revenue slips amid ongoing restructuring.
"[Nokia's plan] delineates a scale of earnings pressure and cash consumption that is larger than we had previously assumed,? said Wolfgang Draack, a senior vice president at Moody?s. As part of the restructuring effort the company expects to lose some 1.25 million euros, or about $1.58 million US, through the end of 2013.
Despite being a major player in Microsoft's new Windows Phone platform initiative, which some analysts believe will hold more market share than Apple's iPhone by 2016, Nokia saw smartphone shipments drop 60 percent year-on-year in the first quarter of 2012 while cheaper feature phone sales took a 16 percent hit during the same period. Overall, Nokia posted a loss of some $1.7 billion in quarter one with most of the steep decline blamed on the switch away from Symbian to Windows Phone. It was reported that the company actually made more money on a patent licensing settlement from Apple than it did selling the Lumia Windows Phone.
Nokia's Lumia 900 Windows Phone.
Moving into 2012, CEO Stephen Elop warned that second quarter losses would be higher than expected and may be equally unfavorable in the quarter three. In a statement on Friday, Fitch analysts said that Nokia is looking at a "precarious combination of a depleted cash balance, without an end in sight to the declining cash flows."
Nokia stock fell 18 percent on Thursday after the dismal forecast was announced and has yet to regain any real footing.
Comments
Ouch.
I used to have a Nokia phone. That ended in 2005. Then I had a Sony-Ericsson phone.
In 2007 I got an iPhone.
End of story.
there is really nothing left, who looks for a "nokia" anything
this will be the basis for mba thesis about failure
but in the tech world things happen much faster, much longer for kmart vs walmart, now sears is a shadow of itself
really amazing
another mba subject samsung, IP, and how lawyers can copy a phone
What has Apple wrought!
Or, perhaps, I should say, what have we wrought.........
Quote:
Originally Posted by SolipsismX
It's not looking good for either Nokia or RiM. Which one is likely to go under first. RiM is closer to death's door but Nokia appears to be falling faster.
This can't bode well for Microsoft and WP7.
All I'll say is both the hardware and software of the Nokia Lumia 900 Windows Phone look like cr@p!!
I'm quite a fan of both. I can't say I'd choose it over Apple's offerings but if the iPhone didn't exist (yet all this effort to compete with the iPhone still did) I'd certainly get a Lumia over an Android phone.
Me, I'd rather take a BB Bold. Really!!
Quote:
Originally Posted by AppleZilla
I used to have a Nokia phone. That ended in 2005. Then I had a Sony-Ericsson phone.
In 2007 I got an iPhone.
End of story.
My story, too. I was a Sony Ericsson fanboy with a k800i looking forward to upgrading to the k850i, but when I saw a k850i in a store I was shocked at how crappy it was, and got an iPhone.
Be-effing-leaguered!
Quote:
Originally Posted by VisualZone
All I'll say is both the hardware and software of the Nokia Lumia 900 Windows Phone look like cr@p!!
Then you are just a silly fanboy. It is a nice phone that by all accounts performs quite well.
-kpluck
Hmm, great rebuttal...NOT!! Because I say they're both cr@p I'm a fanboy? So when someone doesn't agree with you they must be wrong? Maybe your opinion is cr@p.
p.s. I don't have an iPhone. My company pays for my cellphone so all I have to pay for is my land line.
p.s.s. One more thing Kerplunk...Microsoft blows!!
everything in tech is accelerated. It has become like fashion, in one year out the next, except it doesn't repeat. We aren't going to see a renewed popularity of the Nokia 1011
Quote:
Originally Posted by tasslehawf
This can't bode well for Microsoft and WP7.
You should add Windows 8 RT to that list. From what Nokia's saying, they may not be around by the time MS ships Crapware RT
Quote:
Originally Posted by kpluck
Then you are just a silly fanboy. It is a nice phone that by all accounts performs quite well.
-kpluck
If the public don't buy it then it ainlt performing well at all. Its a stinker and is smelling up AT&T showrooms everywhere just laying there unwanted...road kill.
Quote:
Originally Posted by VisualZone
Me, I'd rather take a BB Bold. Really!!
Really?? Just go into any Canadian truck stop restroom and you get one from a dispenser right next to the condom machine. Same price... I hear RIM has billions of them and are only dribbling them out onto the market. Not that they want to dribble them out, mind you...
Quote:
Originally Posted by SolipsismX
I'm quite a fan of both. I can't say I'd choose it over Apple's offerings but if the iPhone didn't exist (yet all this effort to compete with the iPhone still did) I'd certainly get a Lumia over an Android phone.
I agree. The ONLY thing wrong with WP7/8 is Apps. I have a iphone and the HTC Titan. The Windows phone OS is great, easy to use, unique and has some great ideas within it, but, the app selection is terrible compared to Apple or Android. Sad to see Nokia in the same toilet as RIM but they both decided the iphone wasn't anything to be worried about.
as someone else said. I had a Nokia once, then iPhone came out, end of story. Other than trying the Titan for a minute, I've had nothing but an iPhone and my Next phone will be an iPhone.
Hmmm, RIM, NOKIA, Microsoft all laughed at Apple back in 2007. Wow, tables have turned. 360! That's karma for you, betch!
I wanted to get my newest book printed, professionally, for submission... I had to wait, and looked at their phones.
I must say the new phones look great! Everyones!
The Droid graphics on the display model really pulled me in. I thought "Motoralla". Ok. And the screen LOOKED huge. Mind you, the Motorolla was the only one that was powered apparently. Then I put my iPhone 4S over it, and it didnt seem so much bigger. But the screen was a lot bigger!
The sales person asked me if I wanted anything, (mind you I was there for something else), I said I was happy with my phone and just looking. Also, I did get to look at all the tablets... I really didn't know there were so many. There's a LOT! I was surprised. No iPad though.
Anyway, some rambulings. You guys say "I just ordered mine" a lot and I wanted to post my thought for the day.
By the way Staples can not do 'bleed edge' printing. For future reference...