BackNokia sales disappoint; handset demand wanes
Sales fell 24% to $7.5 billion; net loss was €227 million, compared with €1.4 billion a year earlier
Premium(Henrik Kettunen/Bloomberg)
Stockholm: Nokia Oyj, the Finnish mobile-phone maker attempting a comeback, reported second-quarter revenue trailing analysts’ estimates as handset demand fell.
Sales fell 24% to €5.7 billion ($7.5 billion), Espoo, Finland-based Nokia said on Thursday in a statement. Analysts projected €6.4 billion, the average of estimates compiled by Bloomberg. The net loss was €227 million, compared with €1.4 billion a year earlier. Analysts projected a loss of €258.8 million.
Nokia has lost more than €5 billion in nine quarters as chief executive officer Stephen Elop’s comeback bid hasn’t reversed market share declines. New smartphones, including the Lumia 1020 with a 41-megapixel camera unveiled last week, have failed to stop shoppers from picking up Samsung Electronics Co. and Apple Inc. phones. Smartphone sales volumes fell 27% from a year earlier.
The stock plummeted 22% last year, its fifth straight annual drop, and had gained 5.9% this year through Wednesday.
Sales of Lumias, which run Microsoft Corp.’s Windows software, climbed 32% from the first quarter to 7.4 million units, falling short of the 7.8 million units estimated by analysts surveyed by Bloomberg.
Junk rating
One of the first smartphone makers, Nokia dominated with a global market share topping 50% before Apple’s iPhone and Google Inc.’s Android software were introduced about six years ago. Nokia’s market share has since collapsed to about 3%, according to IDC. The slump has pushed Nokia to losses and forced it to cancel its dividend for the first time in at least 143 years.
Similarly to Nokia, Canada’s BlackBerry has also struggled to challenge Apple and Samsung. The company missed analysts’ estimates for phone shipments and profit for the latest quarter, sending its stock down the most in 13 years.
Nokia’s debt rating was cut this month one step deeper into junk by Standard and Poor’s, which said the handset maker’s net cash may tumble after a deal to buy Siemens AG’s share in their six-year old mobile-equipment venture for €1.7 billion. BLOOMBERG
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