Nokia loss widens to $1.27 billion in Q3

Associated Press, Helsinki | Business | Thu, October 18 2012, 9:20 PM

Nokia Corp. said Thursday that its third-quarter net loss widened to €969 million (US$1.27 billion) as revenue plunged 19 percent and sales of its flagship Windows Phone fell under 3 million units. Investors, however, had been expecting an even bigger drop in sales, and sent shares in the company higher.

The struggling company said that net sales dropped to €7.2 billion ($9.45 billion) and gave a grim outlook for the rest of the year saying the fourth quarter would be "challenging ... with a lower-than-normal benefit from seasonality in volumes."

In 2011, Nokia reported a third-quarter net loss of €68 million on revenues of €8.9 billion.

While the loss was deeper than analysts' forecast for a €610 million shortfall, sales were better than the expectations for €6.99 billion. Nokia's share price surged more than 8 percent to €2.39 ($3.14) in early afternoon trading in Helsinki.

The company said its feature phones had shown strong sales and Nokia Siemens Networks — its joint venture with Germany's Siemens AG — had seen 3 percent revenue growth in the period.

Smartphone revenue dropped more than 50 percent to €976 million with sales its first Windows phones falling to 2.9 million units from 4 million in the second quarter of this year.

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 had hoped to stem the decline in its smartphones through a partnership last year with Microsoft Corp. as it struggles against stiff competition from Apple's iPhone and devices running on Google's Android software.