Nokia has been having a pretty hard time of it financially, after Windows Phone failed to ramp up as rapidly as they hoped, while their Symbian and feature phones sales fell off a cliff.
The company had responded by issue a second profit warning, and launching a restructuring which would see 3 sites being closed and 10,000 employees, 19% of their work force, being laid off.
Citing the â€œdrastically downsizing its infrastructureâ€ as evidence that things were even worse than expected, Moody’s ratings agency downgraded Nokia’s debt grade to junk status Friday. It kept the outlook negative, meaning it could downgrade it again.
Some analysts however saw the restructuring, which would save Nokia $2 billion by the end of next year, more positively.
Oppenheimer analyst Ittai Kidron upgraded the company to "Perform" from "Underperform," saying that the cuts will buy Nokia some time, but its long-term success will depend on new products like the Windows 8 phones â€” and he can’t predict how that phone will fare. He said 2012 will be tough, but 2013 is an "unknown path."
Citi analyst Zahid Hussein also upgraded the company to "Neutral" from "Sell," calling the company’s moves "painful but necessary." He said that if Nokia can successfully cut costs, it could return to break-even as early as the third quarter of 2012, quicker than expected.
Nokia’s U.S. shares added 13 cents, or 5.5 percent, to $2.48 in midday trading. On Thursday, the shares closed down 16 percent at $2.35.
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Via Associated Press.