Fitch Ratings has downgraded Nokia’s debt to “junk” status with a negative long-term outlook, citing disappointing first quarter results from the world’s largest mobile phone maker. The move follows a similar downgrade by Moody’s Investors Service, which last week put Nokia’s debt one notch above “junk.”
Nokia (NOK) maintains a solid position in the global feature phone market, but analysts are worried that the company will not be able to achieve success in the smartphone market. European sales of its flagship Lumia Windows phones have been disappointing, but CEO Stephen Elop says US sales of the product have “exceeded expectations,” despite a software bug that was found in some of the first phones shipped.
Nokia currently has about $5 billion in long-term debt on its balance sheet, and about $13 billion in cash and marketable securities.
The Finnish company did get a bit of good news in Europe this morning. Nokia says it will be able to continue selling its products in Germany after winning a patent dispute with IPCom, which acquired Bosch’s mobile telephony patent portfolio. HTC was also a defendant in that lawsuit, and the European Patent Office has ruled in favor of both Nokia and HTC.
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