Nokia Oyj, the Finnish mobile-phone maker seeking a comeback, reported its smallest quarterly revenue in 13 years as handset demand waned, missing analysts’ estimates and sending its stock down as much as 13%.
First-quarter sales fell 20% to 5.85 billion euros ($7.6 billion), Espoo, Finland-based Nokia said today. Analysts projected 6.52 billion euros, the average of estimates compiled by Bloomberg. Mobile-phone volumes slumped 25%.
Competition from Asian manufacturers building phones that run Google Inc.’s Android software is hurting demand for Nokia’s basic handsets. The sales miss leaves Chief Executive Officer Stephen Elop’s recovery effort in doubt, as nascent demand for Nokia’s Lumia smartphones isn’t enough to offset plummeting demand for the company’s cheaper models.
“The lower-end mobile-phone business is not doing well,” Mikko Ervasti, an analyst at Evli Bank Oyj in Helsinki, said in a phone interview. “They need to start pushing their Microsoft- based Lumias into cheaper prices to gain traction in emerging markets.”
Nokia fell as low as 2.30 euros and lost 6.1% to 2.47 euros at 3:49 p.m. in Helsinki. The stock tumbled 22% last year, its fifth straight annual drop, and had lost 10% this year through yesterday.
The revenue was the smallest since the third quarter of 1999, when Nokia was still a more diverse company with business lines including computer monitors. Its focus on mobile phones pushed quarterly revenue to a record 15.7 billion euros in 2007, after which competition from Apple Inc. led to sliding sales.
Sales of the flagship Lumias running Microsoft Corp.’s Windows software rose to 5.6 million units from 4.4 million in the fourth quarter as Nokia added versions. Apple and Samsung Electronics Co.’s quarterly smartphone sales exceed 100 million units combined.
Nokia sold a total of 61.9 million mobile devices during the three months. Analysts on average predicted 73 million units, including 5.7 million Lumias.
“The decline in our mobile phones business was primarily due to some competitive industry dynamics,” Elop said on a call with reporters. Nokia is preparing “aggressive moves” to respond, he said.
The company plans more competitive pricing, while new products such as the Asha 310 with smartphone-like functions and the ultra-affordable Nokia 105 should help sales, Elop said.