Nokia Stock Falls to 15-Year Low, Downgraded to Junk Status
It’s still too early to make any definitive statements yet, but perhaps I may be wrong about Nokia potentially turning their fortunes around. Following S&P’s and Moody’s queue, Fitch Ratings recently downgraded Nokia’s rating, but they went one step further and pushed them down to ‘junk’ status.
Following the recent recommendations, Nokia’s Q1 financial report of an operating loss of 1.3 billion euros and the pessimistic outlook for the next financial quarter, Nokia shares have fallen two percent and hit a 15-year low of 2.654 euros.
Vice President and CFO Timo Ihamuotila quickly issued a statement:
“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 stock has certainly seen better days and things are looking bleak for Q2. However, I’m not ready to completely bail on the company. Microsoft plans on launching the next version of Windows Phone with Apollo later this year, but it could be both a gift and a curse. Verizon, for instance, has stated their interest in promoting the Windows Phone OS once Apollo launches. With Nokia heavily backing Windows Phone, they’re one of the obvious beneficiaries, but they’ll be getting some increased competition with companies like HTC also putting more support into the OS once Windows Phone 8 is released.
I’m sure Nokia is hoping that the ground they just broke on their new Vietnamese manufacturing plant pays off.