Moody’s slashes beleaguered Nokia to ‘junk’

“Moody’s slashed Nokia’s credit rating to ‘junk’ on Friday after the Finnish cellphone maker cut 10,000 more jobs and forecast a wider-than-expected loss, citing worries about its cash position and slow sales of new Windows phones,” Tenzin Pema and Terhi Kinnunen report for Reuters. “Equities analysts also cut their price targets on Nokia stock on fears the company would continue losing market share to Apple, Google and Samsung Electronics.”
“Moody’s is the third ratings agency to relegate Nokia to non-investment grade status, which means many institutional investors such as pension funds will not buy its bonds,” Pema and Kinnunen report. “S&P and Fitch made similar moves in April.”

Pema and Kinnunen report, “‘Today’s rating action reflects our view that Nokia’s far-reaching restructuring plan… delineates a scale of earnings pressure and cash consumption that is larger than we had previously assumed,’ Moody’s analyst Wolfgang Draack said in a note.”

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