The blows to Nokia’s (NYSE: NOK) fortunes have become fatal now. Fitch downgraded the company’s debt to ‘BB+’ from ‘BBB-‘. The outlook for Long-term Issuer Default Rating is negative, Fitch reported. The reason for the downgrade is not new, but the fact that it come from one of the “big three” ratings agencies is devastating:
The downgrade reflects Fitch’s view that the deterioration in the company’s core Devices and Services division in Q1, together with the company guidance of -3% non-IFRS operating margins or below for the division for Q2 and the general lack of visibility beyond this point, means Nokia’s profile is no longer commensurate with an investment grade rating.
The flawed launch of Nokia’s line of Lumia handsets and its alliance with Microsoft (NASDAQ: MSFT) have not been close to enough to offset concerns, which existed even before new management began to restructure the company.
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