Nokia Q3 loss widens to $1.27 bn; revenue plunges 19%
Describing the third quarter loss, the company said it was ‘difficult’ and that the fourth quarter results would be much more challenging.
Helsinki: Nokia Corp. on Thursday reported a third-quarter net loss of 969 million euro (USD 1.27 billion) as revenue plunged 19 percent even as the sales of its flagship Windows Phone fell to under 3 million units.
In the same period last year, the Finnish company had reported a net loss of 68 million euro.
Considered the world’s biggest mobile phone maker, Nokia has been losing ground to the ever rising Apple and Samsung, a major factor in the company’s quarterly loss. And describing the third quarter loss, the company said it was ‘difficult’ and that the fourth quarter results would be much more challenging.
While the loss was deeper than analysts' forecast for a 610 million euro shortfall, sales beat expectations of 6.99 billion euro. Nokia's share price was up more than 5 percent at 2.31 rueo (USD 3.03) in afternoon trading in Helsinki.
About the sales of its phones, the Finnish company said it sold a total of 83 million devices in the quarter, down slightly from the previous quarter but a plunge of 22 percent from a year earlier when it had unit sales of more than 106 million.
CEO Stephen Elop conceded that Nokia was still suffering as it shifts its operating platform from Symbian and Meego to Microsoft's Windows software.
"As we expected, the third quarter was a difficult quarter in our devices and services business. We continued to manage through a tough transitional quarter for our smart devices business as we shared the exciting innovation ahead with our new line of Lumia products," Elop said. "While we continue to focus on transitioning Nokia, we are determined to carefully manage our financial resources (and) improve our competitiveness."
Nokia, the world's former top cellphone maker, had hoped to stem the decline in smartphones through a partnership last year with Microsoft Corp. as it struggles against stiff competition from Apple's iPhone, Samsung and other devices running on Google's Android software.
North America, on the frontline of the smartphone market, continued to be a disappointment for Nokia as net sales and volumes further dropped by more than 50 percent in the region in the third quarter.
Nokia has lost out in the fierce top-end race and is now also losing ground to Asian makers in lower-end devices.
Samsung overtook Nokia as the world's No. 1 cellphone maker in the first quarter, with 86.6 million units sold, compared with 83 million for Nokia. Nokia led the field for 14 years.
To cut costs Nokia has announced more than 10,000 layoffs this year in an attempt to reduce operating expenses by €1 billion by 2013, and has not ruled out more cutbacks.
With Agency Inputs