Nokia swings to Q3 loss on NSN impairment charge - Mobile World Live

Nokia swings to Q3 loss on NSN impairment charge

15 OCT 2009

Nokia, the world’s largest handset vendor, this morning reported a third-quarter net loss of EUR913 million (compared with a profit of EUR1.1 billion in the year-ago period) as it booked impairment charges on goodwill of EUR908 million for Nokia Siemens Networks (NSN). Net sales for the July to September period fell 20 percent year-on-year to EUR9.8 billion. There were some bright spots though: it shipped 108.5 million mobile devices in the quarter, down 8 percent year-on-year but up 5 percent sequentially. It also expects fourth-quarter total industry mobile device volumes to be up from the third-quarter, and for total industry device shipments for 2009 (1.12 billion) to be 7 percent lower than in 2008, a slight improvement on a previous forecast of a 10 percent contraction. “The demand for mobile devices improved in many markets during Q3,” noted Nokia CEO Olli-Pekka Kallasvuo in a statement. “With the average selling price of our devices holding firm quarter-on-quarter, our higher device volumes translated into increased net sales in our Devices and Services business.” It shipped 16.4 million smartphones in the quarter, giving it a smartphone market share of 35 percent (less than its estimated 38 percent share of the total mobile device market).

Its joint network operation, Nokia Siemens Networks, suffered a 21.2 percent year-on-year fall in net sales (to EUR2.76 billion). NSN reported a third-quarter operating loss of EUR1.107 billion, compared with an operating loss of EUR1 million in the third quarter of 2008. “The challenging competitive factors and market conditions in the infrastructure and related services business necessitated non-cash impairment charges at Nokia Siemens Networks,” added Kallasvuo. “We continue to support Nokia Siemens Networks actions to improve its performance.” At least NSN doesn’t expect the network market slowdown to worsen; it forecasts the mobile infrastructure and fixed infrastructure and related services market to decline approximately 5 percent in 2009 from 2008 levels, a slight improvement on an earlier forecast of a a 10 percent decline. Of note, Nokia for the first time broke out revenue for its high-profile venture into the mobile services market. Net sales for music, gaming, application and other mobile services came in at EUR148 million.

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