Moody’s downgrades Nokia credit rating, outlook negative

HELSINKI—International ratings agency Moody’s on Monday downgraded the long-term debt of Nokia by two notches, to “Ba3″, cautioning the Finnish mobile phone giant would likely suffer even deeper than expected losses going forward.

“Nokia’s transition in the smartphone business will cause deeper operating losses and consequently cash consumption in the coming quarters than we had previously assumed,” the ratings agency said in a statement, adding that the outlook on all of Nokia’s ratings remained negative.

Moody’s had bumped Nokia to “junk” status in June, two months after the two other large ratings agencies, Standard and Poor’s and Fitch, but the drop to Ba3 places the Finnish mobile phone maker four notches below investment grade.

Monday’s downgrade came after Nokia last Thursday reported far worse-than-expected second-quarter results, posting a net loss of 1.41 billion euros ($1.74 billion), about four times their loss of 368 million euros during the same period a year earlier and more than double the loss anticipated by analysts.

Nokia, which recently lost its ranking of 14 years as the world’s biggest mobile phone maker, dramatically changed its strategy a year and a half ago, deciding to phase out its Symbian smartphones in favor of a partnership with Microsoft.

But Moody’s said it was disappointed with Nokia’s outlook and cautioned that its new Lumia smartphones, which the company is counting on to help it survive stiff competition from RiM’s Blackberry, Apple’s iPhone and handsets running Google’s Android platform, were loss-making.

The ratings agency also stressed there was no guarantee Nokia’s highly anticipated Windows Phone 8, set to launch later this year, would help it get back in the black.

“A return to profitability in the Devices & Services (D&S) segment on the back of smartphones with the Windows Phone 8 mobile operating systems is by no means assured,” the agency said.

Nokia, meanwhile, said it was disappointed with the downgrade, but insisted in a statement that “its impact on the company is limited.”

“Nokia’s financial position remains strong,” it stressed, pointing out that as of the end of June it had a net cash balance of 4.2 billion euros and a credit facility of 1.5 billion, which it can count on until 2016.

Following Monday’s announcement, Nokia saw its share price drop 3.02 percent to 1.38 euros a piece in afternoon trading on a Helsinki stock exchange down 3.04 percent. (Inquirer.net)

Nokia cuts US price of flagship smartphone

HELSINKI—Nokia has cut in half the price of the Lumia 900 in the United States in an effort to boost sales of its flagship smartphone running on the Windows Phone operating system.

The device is now being offered for $49.99 with a two-year contract with AT&T, down from $99.99 when it was launched three months ago.

In a statement Monday, Nokia spokesman Doug Dawson called the move “a normal strategy that is put in place during the life cycle of most phones.”

He declined to reveal sales figures, saying they would be released in Nokia’s second-quarter earnings report on Thursday.

Nokia is facing tight competition in smartphones from competitors including Apple Inc. and Samsung and has struggled to make an impact in the U.S. market.

Source: Inquirer

Nokia Knocks Lumia 900 Price Down to $50

Nokia has cut the price of its flagship Lumia 900 phone in half just three months after it hit the U.S. market. The Windows-based smartphone now costs $49.99 with a two-year contract from AT&T.

The new price took effect Sunday, The Wall Street Journal reports. Nokia’s and AT&T‘s website have both been updated to reflect the change.

The price cut comes less than a month after Microsoft unveiled its next-generation mobile OS, Windows 8 — and with it, news that Lumia 900 phones will not be getting the upgrade. If the phone wasn’t selling well before that bit of news dropped, it’s likely selling much worse now.

A Nokia spokesperson told the Journal that the move was “a normal strategy that is put in place during the life cycle of most phones.” He pointed out Samsung’s Galaxy S II experienced a similar price drop in that timeframe.

Sales of the Lumia 900 initially appeared to be strong; the device was listed as the bestselling smartphone on Amazon the week following its release. Reviews were overwhelmingly positive.

The Finnish company has had a tough quarter. Last month, Nokia announced it will close its factories in Finland, Germany and Canada, and lay off up to 10,000 workers before the end of 2013. The company reports second-quarter earnings on Thursday.