N9kia (NYSE: NOK), already almost without a pulse, was downgraded to junk by S&P.
The agency said
Standard & Poor’s Ratings Services said today that it had lowered its long-term corporate credit rating on Finland-based mobile telecommunications equipment manufacturer Nokia Corp. to ‘BB+’ from ‘BBB-‘ and its short-term corporate credit rating to ‘B’ from ‘A-3’. The outlook is negative.
At the same time, we lowered our issue ratings on Nokia’s unsecured debt to ‘BB+’ from ‘BBB-‘ and assigned recovery ratings of ‘3’ to this debt, reflecting our expectation of meaningful (50%-70%) recovery prospects in an event of payment default.
The rating action reflects a downward revision of our expectations for revenues from Nokia’s Devices and Services division in 2012 and a subsequent revision of our profitability and cash flow assumptions.
S&P showed little faith in the new alliance with Microsoft (NASDAQ: MSFT) which has already produced the buggy Lumia 900. The smartphone is based on Window OS. Nokia has largely abandon its own Symbian OS, a move which S&P questioned.
The announcement came on the same day that Strategic Analysts reported that Samsung passed Nokia as the world’s largest handset company by volume
It is only a matter of time before Nokia is broken into two piece–one smartphone, and the other cheap handsets, and sold
Douglas A. McIntyre
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