Nokia News Roundup – S&P downgrades, Elop says soon for Windows Phone 8
Nokia appear to be having one of those days where they can’t get much of break from the financial institutions that help determine their fate. S&P has once again downgraded Nokia who now stand with a BB- rating—effectively making them “junk”.
Such a label is an indication to investors that sinking money into Nokia is speculative or high-risk. What’s more, S&P indicate that further downgrades could be Nokia’s future should things not turn around quickly.
For their part, Nokia quickly put our a press release noting that
"The impact of Standard & Poor's decision on the company is limited. As we continue our transition, we are applying a strong focus on cash conservation while simultaneously reducing our operating costs and making our operating model stronger and more agile.
We ended the second quarter 2012 with gross and net cash both higher than a year earlier. With gross cash of EUR 9.4 billion and net cash of EUR 4.2 billion, we have a strong financial position and robust liquidity profile. We also have access to additional liquidity via a revolving credit facility of EUR 1.5 billion. This is entirely undrawn, available to us until March 2016, and comes without any financial covenants."
In short, that means austerity and Nokia is doing all they can to slash and burn to make the company lean again.
None of this is too surprising and it remains to see what the long-term impact will be. If anything, it grabs some headlines as “junk status” just sounds terrible but bigger companies have survived a lot worse and we think Nokia still has a big future.
As of this writing, Nokia stock is rading up nearly 2% at $2.54 a share, staying well above the $2 mark now for the last 2 weeks.
In other news, Nokia CEO Stephen Elop strongly hinted at upcoming news for their Windows Phone 8 lineup stating that such devices will be released "relatively near term”. That implication is of course for Nokia World in a few weeks where the Finnish company is expected to reveal up to three new Windows Phones featuring the Apollo operating system.
At least two of those devices may have been partially revealed with the ‘Phi’ and an unnamed device spotted yesterday. The ‘Phi’ is thought to be a Lumia 800/900 type device with a 4.65” screen and dual-core processors while the unnamed phone looks to be more of a mid-range device echoing the Lumia 610/710 design.