Nokia announced another loss-making quarter, with continued weakness in both its mass market and smartphone units – although there are some signs that momentum is picking up for its Windows Phone devices, albeit slowly.
In a statement, Stephen Elop, the company’s CEO, said that with regard to its Mobile Phones unit, it is “planning to take actions to focus its product offering and improve product competitiveness”. This will see the loss of up to 440 jobs globally.
He said that this business “started to demonstrate some signs of recovery in the latter part of the second quarter, following a difficult start to the year”.
Nokia saw a 39 per cent decrease in mobile phone sales during the quarter, to €1.41 billion from €2.29 billion, as unit shipments dropped by 27 per cent to 53.7 million.
The company also started shipments of its Asha 501 device, which “brings a new design and user experience to the highly-competitive sub $100 market.”
Shipments of 7.4 million Lumia devices was “the highest for any quarter so far”, with the company noting that in the third quarter it expects new products “will drive a significant part of our Smart Device revenue”.
But smart device sales were down 24 per cent year-on-year, falling to €1.16 billion from €1.54 billion, as volumes shrank by 27 per cent. Nokia no longer has any meaningful Symbian OS device shipments to bolster its Lumia tally.
As a whole, devices and services net sales decreased by 32 per cent to €2.72 billion from €4.02 billion, with device volumes falling 27 per cent to 61.1 million from 83.7 million.
The company noted that in Greater China and Europe its performance was primarily due to lower sales of smartphones, while in APAC, MEA and Latin America, it was lower mass market device sales which had an impact.
Referencing the recent decision to acquire Siemens’ 50 per cent stake of Nokia Siemens Networks, Elop said “we believe we will create value for Nokia shareholders and look forward to strengthening Nokia Siemens Networks as a more independent entity”.
Net sales at NSN fell by 17 per cent year-on-year to €2.78 billion, which was attributed to the sale of businesses “not consistent with NSN’s strategic focus”, and the exiting of certain customer contracts. Also noted was reduced wireless infrastructure deployment activity.
In the Here services business, sales fell by 18 per cent to €233 million from €283 million, impacted by lower internal sales related to weakness in Nokia’s smart device business unit. Sales to external customers increased by 8 per cent to €195 million, due to higher sales to vehicle customers – and also benefitting from a negative adjustment made in the year-ago quarter.
On a group level, the company saw a loss attributable to shareholders of €227 million, compared with a loss of €1.41 billion in the year-ago quarter, on revenue of €5.7 billion, down 24 per cent from €7.54 billion.
It claimed “underlying operating profitability” on a non-IFRS basis, driven by a strong performance at NSN.