Nokia sales hit 13-Year low as phone demand misses estimates

U.S. Device

Nokia is also preparing to introduce new smartphones, Elop said, a category in which the company is seeking to break the dominance of Apple’s iPhone and Samsung’s Galaxy devices. A major U.S. wireless carrier is expected to introduce a Nokia device “in the month immediately ahead,” Elop said.

Once the world’s largest smartphone maker, Nokia had more than 50% of the market before Apple’s iPhone and Google’s Android were introduced about six years ago. Nokia has lost about 90% of its market value since then and fallen outside the top-five smartphone makers.

In the last three months of 2012, Cupertino, California- based Apple sold 47.8 million iPhones and South Korea’s Samsung, the biggest maker of Android devices, sold 62 million smartphones.

Elop, who joined from Microsoft, started betting on his former employer’s operating system after Nokia’s homegrown Symbian software fell out of favor among consumers.

Reducing Costs

Revenue at Nokia’s handset business slumped 32% to 2.89 billion euros. Operating profit at the unit, excluding some items, was 0.1% of sales. The company had predicted a margin of between negative 6% and positive 2%.

This quarter, that margin will be negative 2%, plus or minus 4 percentage points, Nokia predicted. Evli’s Ervasti predicts a margin of 0.7%.

To reduce costs, Elop has cut more than 20,000 jobs and closed production and research sites since taking over in 2010. For the last three months of 2012, the company posted its first profit in seven quarters.

The first-quarter net loss narrowed to 272 million euros, or 7 cents a share, from 928 million euros, 25 cents, a year earlier.

Nokia Siemens Networks, the company’s equipment joint venture with Siemens AG, posted a first-quarter operating profit of 196 million euros, excluding some items, as sales fell 5% to 2.8 billion euros.

Nokia’s net cash increased to 4.5 billion euros from 4.4 billion euros at the end of December. Nokia’s debt is at junk status with the three main rating companies. In January, Nokia scrapped its dividend for the first time in at least 143 years to bolster its liquidity position.

Bloomberg News

<< Page 2 of 2

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome