REUTERS

HELSINKI STANDARD & Poor’s has cut its credit rating on Finnish cellphone maker Nokia to junk on expectations of lower sales, following a similar move by Fitch Ratings earlier this week.

S&P said on Friday the decline in sales in Nokia’s phone business this year could be similar to the 18 percent fall in 2011, and downgraded its rating to BB+ from BBB-.

Nokia, once the world’s dominant mobile phone provider, has lost out to Apple and Google in the smartphone business.

Chief executive Stephen Elop is pinning hopes of a turnaround on Lumia - a new range of smartphones which use Microsoft software. Sales so far have been slow, and are yet to compensate for diving sales of legacy products.

“We still expect revenue from Lumia smartphones to grow over time but not sufficiently to offset a rapid decline in revenue from Symbianbased smartphones over the next few quarters,” S&P analysts said in a note.

Nokia said it had 4.9 billion euros ($6.5 billion) net cash reserves and was trying to turn around the business.

“The main focus of these actions is on lowering the company’s costs, improving cash flow and maintaining a strong financial position, while bringing attractive new products to market,” finance director Timo Ihamuotila said in a statement