Downgrade of Nokia debt rating "negative"

In the early hours of June 10, Beijing time, Standard Poole, the credit rating agency, today downgraded Nokia's debt rating from "A-/a-1" to "bbb+/a-2" and put Nokia on its credit watch list, with the Outlook "negative" (Negative).　　S & P said the move reflected a recent statement by Nokia that it expects its equipment and services division to be less than previously expected for second-quarter sales and operating margins, largely because of increased competition pressure. "After Nokia issued this significant sales and profit alert, we made the first downward revisions to Nokia's 2011-year sales and profitability forecasts," the US and the poor said in a statement. Despite the limited visibility of Nokia's existing handset portfolio, we are now expecting revenue from its equipment and services sector to fall by 10% per cent, excluding the cost of restructuring operating margins at the lower end of the 1% to 9% range. "Our expectation is based on the assumption that Nokia's existing smartphone and handset portfolio will face significant price competition over the next few quarters, and that the pressure on sales and profit margins will only be increased by significant smartphone sales in the industry," the statement said. The increase in marketing spending and the cost-cutting measures are partly offset. We expect Microsoft to provide significant marketing and sales support for Nokia's first smartphone using Windows Phone as its operating system, which will partly offset Nokia's pressure. "Standard Poole also expects Nokia's free operating cash flow to be negative in 2011." (Tangfeng)