Nokia comments on Fitch's downgraded credit rating announcement
Nokia has released a press statement commenting on the recent credit rating downgrade carried out by Fitch Ratings. The rating agency cut Nokia Oyj to 'junk' and announced that the outlook for the manufacturer is bleak. This negative move follows Moody's credit rating cut to the lowest investment level, as well as Nokia's recent Q1 2012 finance report detailing a heavy €590 million loss.
Timo Ihamuotila, Nokia's Executive Vice President and CFO, commented the following:
"We are quickly taking action to position Nokia for future growth and success. Nokia will continue to increase its focus on lowering the company's cost structure, improving cash flow and maintaining a strong financial position. Nokia's financial position remains strong. As of March 31 2012, Nokia had gross cash balances of EUR 9.8 billion, and a net cash position of EUR 4.9 billion. Nokia reported its first quarter 2012 results on April 19, 2012."
Windows Phone enthusiasts know first-hand that Nokia's pockets are extraordinarily deep for a company in such a financial (and market share) hole. The marketing expenditure alone has been huge, it was only last year that we reported the manufacturer tripled expenses on promoting Lumia Windows Phones.
Ihamuotila highlighted in his comment that the company is still in its 'transition' stage by getting to grips with the Windows Phone adoption. As well as focusing on the mobile platform and partnership with Microsoft, Nokia will look to continue to lower the company's cost structure, while improving cash flow and maintain a strong financial position. A few figures were thrown into the statement for good measure - gross cash balance of €9.8 billion and a net cash position of €4.9 billion.
Both Nokia and Microsoft has had Windows Phone in mind as a marathon and not a sprint. The companies (as well as other OEMs supporting the platform) do not expect marketshare and sales to suddenly skyrocket, but it's positive to see Nokia able to hold its own for a while longer. Let's keep our eyes peeled for the Q2 finance report from the company which should take into account the Lumia 900 push in the states.