Reacting to Standard & Poor's credit rating announcement, Finnish cellphone maker Nokia said that its financial position remains strong and it is implementing a decisive action plan to position it for future growth and success.

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.

“As we have detailed in recent announcements, Nokia is in the middle of a transformation program which encompasses every aspect of our business. We are implementing a decisive action plan to position our company for future growth and success. 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", said Timo Ihamuotila, Nokia's Executive Vice President and CFO.

Nokia's financial position remains strong. As of March 31, 2012, Nokia had gross cash balances of EUR 9.8 billion, and a net cash position of EUR 4.9 billion, the company said.

S&P said 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. Its shares were down 0.7 percent at 1210 GMT.

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 Symbian based smartphones over the next few quarters," S&P analysts said in a note.