Europe

Home page

Europe

Nokia suffers Q1 loss despite Lumia sales up

18 April 2013 22:17 (UTC +04:00)

Baku-APA. Finland-based mobile giant Nokia lost 150 million euros (196 million U.S. dollars) in the first quarter of this year, despite the fact its flagship Lumia phones sold better than previously expected, the company said on Thursday, APA reports.

Since the performance did not meet the market expectations, Nokia's share price fell as much as 11 percent in the Helsinki Stock Market soon after the results were announced.

According to the Q1 report, the loss of 150 million euros was minimal compared with 1,338 million euros in the first quarter last year. However, the net sale of 5.9 billion euros was down by 20 percent from 7.4 billion euros in the first quarter of 2012.

A total of 61.9 million mobile devices were sold in the last three months, compared with 82.7 million units in the same period of 2012. Among the devices sold, 6.1 million units were smart phones, shrinking by 49 percent from last year.

However, the popularity of Nokia's flagship Lumia smart phones was better than expected. The volume was 5.6 million units, which rose by 27 percent compared with the fourth quarter of 2012.

Contrary to previous forecasts by some analysts, the performance of Nokia Siemens Networks was unsatisfactory. It merely achieved net sales of 2,804 million euros, down by 30 percent compared with Q4 2012; whereas its operating profit only stood at 3 million euros, decreasing by 99 percent from the previous quarter.

Despite the poor operating performance, the financial status seemed to be stable, according to the announcement. Net cash and other liquid assets accounted for 4.4 billion euros, which was up by 3 percent compared with the previous quarter.

"Nokia's improvement in its cash flow, in a certain degree, could be attributed to the result of a series of its layoffs," a former project manager of Nokia commented on condition of anonymity.

Nokia's CEO Stephen Elop seemed optimistic about the company's result. "At the highest level, we are pleased that Nokia Group achieved underlying operating profitability for the third quarter in a row," he said in the announcement.

Elop admitted that Nokia's mobile phone business is facing a difficult competitive environment, and "we are taking tactical actions and bringing new innovation to market to address our challenges."

The once blue-chip company launched its low-cost versions of smart phones - Lumia 520 and Lumia 620 early this year. Both proved successful in the Asian markets.

Recently, Nokia relaunched its feature phones, the prices of which are about 15 euros, in order to enhance its low-end product portfolio. Nevertheless, results of these measures have not been seen yet.