As Moody downgrades its debt rating, Nokia points out it has $6.5 billion in cash

As every oil tanker captain knows, it takes a long time to turn the ship.

In the case of Nokia, there are positive signs its strategic decision to adopt Windows Phone is paying off, but in the short term it's sinking into loss.

That's something which is going to be confirmed on Thursday when it announces its Q1 figures. And preempting those, credit ratings agency Moody has formally downgraded the company's debt.

As Nokia points out, its long-term credit rating remains 'investment grade', but its downgrading to Baaa3 will increase the company's interest costs.

Moody also maintained a negative outlook on the rating, suggesting it doesn't expect positive news anytime soon.

As for Nokia, it fought back, pointing out it has net cash of €4.9 billion ($6.5 billion).

It added that cash conservation remains a priority during its transition, and it expects to make annual savings of €2 billion ($2.7 billion).

"Nokia is quickly taking action. Nokia will continue to increase its focus on lowering the company's cost structure, improving cash flow and maintaining a strong financial position," said CFO Timo Ihamuotila.

Nokia will report its first quarter 2012 results on 19 April.