Standard and Poor has once again expressed little confidence that Nokia would be able to right their ship, and instead sees it as rapidly sinking.
S&P lowered Nokia’s credit rating to BB- from BB+, and kept the outlook for the company’s credit at negative. The agency said Nokia’s second-quarter results and its financial guidance for the third quarter were lower than it had expected.
“We have subsequently also revised our cash-flow assumptions, including the impact from Nokia’s restructuring of its Devices and Services division,” it said. Noting that current Lumia phones would not get the WP8 upgrade, they addedÂ “To defend its market share, we believe that Nokia might lower the price of Lumia phones further in the coming quarters.”
S&P said they expected it would”take some time” before new Windows Phone 8 handsets can help stabilize revenue, which S&P expects will decline some 16% to 19% this year.
Nokia had 4.2 billion euros ($5.16 billion) cash in Q2, down from EUR4.9 billion at the end of Q1 2012. S&P said it anticipates that Nokia’s net cash will fall below EUR3 billion by the end of the year, including its restructuring outflows.
Nokia’s credit currently carriers junk status from all three rating agencies.
It appears Nokia is now no longer flustered by this status however, and responded to S&P’s downgrade by insisting the company is in no immediate trouble.
Nokia Chief Financial Officer Timo Ihamuotila said NokiaÂ has a “strong financial position and robust liquidity profile,”, added that it has access to additional liquidity through a EUR1.5 billion credit facility than runs until 2016.
“The impact of Standard & Poor’s decision on the company is limited,” he concluded.
The rating cut is the second by S&P since April.