Shares of Nokia Corp. took a dive on Tuesday after the device maker got some bad news from a ratings firm.
Moodys Investors Service slashed Finland-based Nokias outlook from stable to negative, and Nokias stock subsequently dropped 22 cents, or 1.94 percent, by 2:08 p.m. Eastern.
Analysts for Moodys are concerned that introducing devices based on the Symbian 3 mobile operating system, and new managements restructuring initiatives, wont be enough to save Nokia. The measures, analysts wrote, may turn out to be insufficient to reverse Nokia’s loss of market share in mobile phones and converged devices and thus to return group operating margins to above 10 percent, one of Moody’s rating criteria.”
Nokia, still considered the largest wireless handset maker in the world, slowly is losing that stature as Apples iPhone and Android-powered devices dominate the devices market. Nokia has yet to release a high-end smartphone to compete with the likes of the iPhone and Droid, and even though the company has taken recent steps including hiring a new CEO and firing hundreds of workers to address the problem, hopes for success are dwindling.
In fact, Moodys cautioned that if Nokia doesnt stem the declines in its profit margins, its financial metrics which remain strong for now stand to weaken.