Ratings agency Fitch dealt Nokia another blow, stating that it had downgraded its view of the ailing Finnish device maker.

Fitch said that it had already warned it would take a negative action if it was not convinced that the vendor could stabilise its revenue decline and be capable of generating single-digit operating margins in its core Devices & Services division.

Nokia’s poor second quarter results indicate that “the company is currently not near this position and Fitch is not convinced that this can be attained anytime soon”, Fitch said.

In a statement, the ratings agency said that it “believes that the company does not have products in its current portfolio that can stem the recent losses.”

It notes that while the launch of a Windows Phone 8 powered range is “crucial”, it also argues that “the degree of competition in the industry would suggest that it is going to be difficult to re-establish a significant presence in the smartphone market”.

While observing that Nokia still has a cash position that is “strong”, it warns that this is likely to be “eroded significantly” in the next two years by restructuring charges. Noting Nokia’s operating losses, it said that “if these…are not reversed, the support that the cash cushion gives the rating is going to be eroded faster, which could lead to further downgrades.”