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Nokia reports €487 million loss

by Scott Bicheno on 21 July 2011, 12:05

Tags: Nokia (NYSE:NOK)

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A mountain to climb

There was a sense of ghoulish anticipation about Nokia's latest quarterly earnings announcement, given its well-documented struggles in the smartphone market and its sales warning at the end of May, and Nokia didn't disappoint.

The grim truth is that Nokia made an operating loss of €487 million in Q2, having made a profit of €439 million in the previous quarter. The previous warning was that sales from the devices division would be below the previous guidance of €6.1-€6.6 billion. The eventual figure was €5.467 billion - a big drop from both the previous, and year-ago quarters.

Shipments of Nokia smartphones plunged to 16.7 million, which means it has officially relinquished its status as the number one smartphone company to Apple.

"The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011," said CEO Stephen Elop. "However, even within the quarter, I believe our actions to mitigate the impact of these challenges have started to have a positive impact on the underlying health of our business. Most importantly, we are making better-than-expected progress toward our strategic goals.

"In Q2, our immediate action to manage unexpected sales and inventory patterns enabled us to create healthier sales channel dynamics, which led to greater business stability in the latter weeks of the quarter.

"It was also validated during Q2 that Nokia understands how to take advantage of our strong intellectual property portfolio. We are well positioned to defend against intellectual property claims and to ensure that other industry participants are properly licensed.

"Thus, while our Q2 results were clearly disappointing, we are executing well on the initiatives that are most important to our longer term competitiveness.  Some progress is already evident, and thus we are targeting to end this year with more net cash and liquid assets than at the end of Q2 2011.  We firmly believe that our deliberate and unwavering commitment to making the changes necessary at Nokia is the right way to deal with the disruptive forces in our industry and drive value creation for our shareholders."

 

 

Reported and Non-IFRS second quarter 2011 results1,2

EUR million

Q2/2011

Q2/2010

YoY
 Change

Q1/2011

QoQ
 Change

Nokia

 

 

 

 

 

 Net sales

9 275

10 003

-7%

10 399

-11%

 Operating profit

-487

295

 

439

 

 Operating profit (non-IFRS)

391

660

-41%

704

-44%

 EPS, EUR diluted

-0.10

0.06

 

0.09

 

 EPS, EUR diluted (non-IFRS)3

0.06

 0.11

-45%

 0.13

-54%

 Net cash from operating activities

-176

 944

 

-173

 

 Net cash and other liquid assets4

3 891

 4 088

-5%

 6 372

-39%

Devices & Services5

 

 

 

 

 

 Net sales

5 467

6 799

-20%

7 087

-23%

 Smart Devices net sales

2 368

 3 503

-32%

3 528

-33%

 Mobile Phones net sales

2 551

 3 190

-20%

 3 407

-25%

 Mobile device volume (million units)

88.5

111.0

-20%

108.5

-18%

 Smart Devices volume (million units)

16.7

25.2

-34%

24.2

-31%

 Mobile Phones volume (million units)

71.8

85.8

-16%

 84.3

-15%

 Mobile device ASP6

 62

61

2%

 65

-5%

 Smart Devices ASP6

 142

139

2%

 146

-3%

 Mobile Phones ASP6

 36

37

-3%

 40

-10%

 Operating profit

 -247

643

 

690

 

 Operating profit (non-IFRS)

 369

647

-43%

694

-47%

 Operating margin %

-4.5%

9.5%

 

9.7%

 

 Operating margin % (non-IFRS)

6.7%

9.5%

 

9.8%

 

NAVTEQ

 

 

 

 

 

 Net sales

245

252

-3%

232

6%

 Operating profit

-58

-81

 

-62

 

 Operating profit (non-IFRS)

53

50

6%

54

-2%

 Operating margin %

 -23.7%

 -32.1%

 

 -26.7%

 

 Operating margin % (non-IFRS)

21.5%

19.8%

 

23.3%

 

Nokia Siemens Networks7

 

 

 

 

 

 Net sales

 3 642

3 039

20%

3 171

15%

 Operating profit

 -111

 -179

 

 -142

 

 Operating profit (non-IFRS)

40

51

-22%

3

 1233%

 Operating margin %

 -3.0%

 -5.9%

 

 -4.5%

 

 Operating margin % (non-IFRS)

1.1%

1.7%

 

0.1%

 

 



HEXUS Forums :: 2 Comments

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“The grim truth is that Nokia lost €487 million in Q2, having made a profit of €487 in the previous quarter.”

Isn't that meant to be 439 million Euro??
Come on Sea Ray …