Despite Decent Sales of Lumia Devices Nokia Still Posts a Loss of Roughly $196 Million

By: Ali Raza  |   April 18th, 2013   |   Business, News, Smartphones

The Finnish mobile maker Nokia has announced its first quarter results for 2013 on Thursday, April 18th. The company has posted a loss of €150 million which is roughly $196 million. Total sales of the Lumia handset maker were €5.8 billion ($7.6 billion) in the last quarter. An interesting thing about Nokia’s quarterly result is that the sales of its flagship Lumia phones saw an increase of 27 percent as compared to the previous quarter. Nokia has managed to do so because it has sold 5.6 million units of the Lumia handsets that according to the company, is actually “reflecting increasing momentum”. However, on the whole the device volumes of Nokia remained 30 percent lower in comparison to the last quarter of 2012, as its shipments slid down by 55.8 million units.

 

Although, Nokia managed to improve on its losses, the smartphone manufacturer failed to meet the expectations of analysts who claimed that the Windows phone maker will post $8.65 billion of revenue with $0.05 EPS.

 

Nokia CEO, Stephen Elop, said on this occasion that, “At the highest level, we are pleased that Nokia Group achieved underlying operating profitability for the third quarter in a row. While operating in a highly competitive environment, Nokia is executing our strategy with urgency and managing our costs very well.

 

We have areas where we are making progress, and areas where we are further increasing the focus. For example, people are responding positively to the Lumia portfolio, and our volumes are increasing quarter over quarter. Nokia Siemens Networks delivered another strong quarter and contributed to an overall improvement in Nokia Group’s cash position. On the other hand, our Mobile Phones business faces a difficult competitive environment, and we are taking tactical actions and bringing new innovation to market to address our challenges.

 

All of these efforts are aimed at improving our financial performance and delivering more value to our shareholders.”

 

The total volume of Nokia smartphones in fourth quarter of 2012 was 15.9 million units, of which 9.3 million were all-touch Asha smartphones, 4.4 million were from the Lumia family, whereas 2.2 million smartphones were Symbian. This was the first time that the number of Lumia handsets of Nokia had surpassed the Symbian models.

 

Here are further details:

 

“FINANCIAL AND OPERATING HIGHLIGHTS

 

Nokia Group non-IFRS EPS in Q1 2013 was EUR -0.02; reported EPS was EUR -0.07.

 

Nokia Group achieved underlying operating profitability for the third consecutive quarter, with a Q1 non-IFRS operating margin of 3.1%.

 

Devices & Services achieved underlying profitability for the second consecutive quarter, with a Q1 non-IFRS operating margin of 0.1%. Devices & Services benefitted from a strong focus on cost as well as the reversal of approximately EUR 50 million of previously recognized inventory related allowances in Q1.

 

Nokia Siemens Networks achieved underlying profitability for the fourth consecutive quarter, with a Q1 non-IFRS operating margin of 7.0%. Nokia Siemens Networks benefitted from strong gross margin performance in Q1.

 

Nokia Group net sales in Q1 2013 were EUR 5.9 billion

 

Devices & Services Q1 net sales decreased 25% quarter-on-quarter to EUR 2.9 billion.

 

Lumia Q1 volumes increased 27% quarter-on-quarter to 5.6 million units, reflecting increasing momentum. – Mobile Phones Q1 volumes decreased 30% quarter-on-quarter to 55.8 million units, reflecting competitive industry dynamics and an estimated higher than normal seasonal decline in the market addressable by Mobile Phones.

 

Nokia Siemens Networks net sales decreased 30% quarter-on-quarter to EUR 2.8 billion, reflecting industry seasonality.

 

Nokia Group net cash higher quarter-on-quarter

 

Nokia Group ends first quarter 2013 with a strong balance sheet and solid cash position. Gross cash was EUR 10.1 billion and net cash was EUR 4.5 billion.

 

Nokia Group strengthened its net cash position by approximately EUR 120 million sequentially. Nokia Siemens Networks contributed approximately EUR 210 million to the Nokia Group net cash position.”

 

Source: TNW