Nokia post losses to $1.87 Billion As Sales Continue to Slide

Nokia post losses to $1.87 Billion As Sales Continue to Slide

Nokia has announced a loss for the second quarter of this year of EUR1.53 billion (US$1.87 billion), compared to a loss of EUR492 million a year ago.

Revenues also fell by 19 percent year on year to EUR7.54 billion (US$9.3 billion), although they were up very slightly compared to the first three months of the year.

Commenting on the Q2 results, Stephen Elop, Nokia CEO, said: “Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources.”

“While Q3 will remain difficult, it is a critical priority to return our Devices & Services business to
positive operating cash flow as quickly as possible.” he added.

The company also warned that it might have to make non-cash write downs of the goodwill attached to its businesses in the future. The goodwill totaled EUR4.99 billion at the end of June.

In the smartphone division, sales fell by a third to EUR1.54 billion, although the average selling price per handset actually rose to EUR151.

On a year-on-year basis, the decline in our Smart Devices net sales in the second quarter 2012 was primarily due to lower Symbian volumes, partially offset by sales of Nokia Lumia devices.

All regions showed a significant year-on-year decline in the second quarter 2012 except for North America, where the sharp decline in sales of Symbian devices was more than offset by sales of Lumia smartphones.

The company sold a total of 10.2 million smartphones, compared to 16.7 million smartphones sold a year ago.

In the basic mobile phone market, the company saw revenues fall by 11% to EUR2.29 billion, and the average selling price per handset also fell by 14% to EUR31. However, mobile phone sales volumes rose slightly, by 2 percent to 73.5 million handsets.

At June 30, 2012, Nokia employed a total of 113,562 people, compared to 138,634 people at June 30, 2011. The company expects to cut 10,000 jobs by the end of 2013.

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