Nokia Q1: Lumia shipments up 25 percent

Nokia Q1: Lumia shipments up 25 percent

Summary: The Finnish phone maker tumbles after its profitable fiscal fourth quarter as it dips back into the red again.

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TOPICS: Nokia
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Nokia reported its first quarter earnings on Thursday, sending a clear signal to partner Microsoft that it continues to struggle getting back on the financial track.

lumia-920-att-cyan465
(Image: Nokia)

The report comes only a few days after Microsoft, Nokia's partner in the smartphone space, sent a strong signal that it thinks the Finnish phone maker is doing "great," and has no plans to roll out a coveted Surface Phone of its own.

The phone maker reported a first-quarter net loss on sales of €5.85 billion ($7.64bn), or €0.02 ($0.03 cents) a share, down from €0.08 a year ago.

Nokia was expected to make a loss of €0.04 ($0.05) per share on revenue of €6.63 billion ($8.73bn). Compared to the year ago quarter, however, when Nokia announced an operating loss of €1.34 billion on €7.35 billion in revenue, things are certainly looking better.

The company's operating loss was €150 million ($195.9m), representing an overall operating margin of -2.6 percent.

By the numbers:

  • Lumia shipments were 5.6 million, up from 4.4 million in the fourth quarter

  • Around two-thirds of all Lumia shipments were Windows Phone 8-based products

  • Total smart device sales totaled 6.1 million during the quarter

  • Total volume sales were down 25 percent year-over-year

Analysts were expecting between 4.8 and 5.8 million Lumia devices sold during the three-month period ending March 31.

Nokia also noted that it ended the quarter with €4.5 billion ($5.88bn) in cash, down from €4.9 billion ($6.39bn) cash on the same quarter a year ago. 

Screen Shot 2013-04-18 at 06.16.22
(Image: Nokia)

Across all geographic areas, sales were down year-over-year and quarter-over-quarter. China saw the steepest drop in shipments from Q1 2012 to Q1 2013, while North American markets saw the greatest quarterly dip from Q4 2012 to Q1 2013.

Screen Shot 2013-04-18 at 06.16.50
(Image: Nokia)

Nokia chief executive Stephen Elop said he was pleased that Nokia "achieved underlying operating profitability for the third quarter in a row." He noted that tough competition in the smartphone market was the main reason behind the fall in phone sales.

We have areas where we are making progress, and areas where we are further increasing the focus. For example, people are responding positively to the Lumia portfolio, and our volumes are increasing quarter-over-quarter.

Nokia Siemens Networks delivered another strong quarter and contributed to an overall improvement in Nokia Group's cash position. On the other hand, our Mobile Phones business faces a difficult competitive environment, and we are taking tactical actions and bringing new innovation to market to address our challenges.

In pre-market trading, $NOK was down by more than 12 percent at 7 a.m. ET.

nok
$NOK down by 5 percent in pre-market trading after its Q1 earnings release. (Image: Google Finance)

Looking ahead, Nokia said it expects second-quarter adjusted handset sales of around -2 percent. The phone maker said that it estimates Lumia shipments to increase by more than 27 percent in the coming quarter.

Topic: Nokia

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45 comments
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  • Zack, do you speak English?

    Besides writing gibberish, I don't think you know the difference between Nokia and Nokia-Siemens. Pretty badly written piece considering, you couldn't be bothered to check your numbers. It says right there in the chart YoY sales down 25% and then too you wrote down 20%.
    "Things are certainly looking better than this time last year." Were you trying to be sarcastic? Or an attempt to be funny? How old are you?
    spinit
    • Corrrected

      And a little less of the attitude, please.
      zwhittaker
      • Still not corrected Zack!

        The revenue figures on a year-on-year basis are down 32%. It is the quarter-on-quarter figures that are down 25%.
        nishsingh
  • it is more bad news for MS

    MS hoped, and expected, that Win 8 would give the company a strong contender in the tablet and mobile phone markets, while driving some additional sales in the sluggish PC market. It has done neither. Win Phone is contending with Blackberry for the title of least desirable phone OS, while Android and Apple continue to dominate in phones and tablets. Consumers sand businesses have shown limited interest in Win 8. OEM's are unwilling to invest in the expensive touch hardware that Win 8 was designed for.

    MS is a huge company with multiple product lines and world class R&D. People expected more, and still do. MS has the resources and the need to got it right. They should continue to dominate in the PC market and will do well with cloud and enterprise services. They are going to continue to struggle in tablets and phones because the competition has better products, lower prices, and are firmly entrenched in the market.
    krossbow
    • no, not exactly

      Things are picking up on the phone side, Q1 is usually a bad quarter for most companies considering it's a post holiday season quarter. Judging by the early leaks of BLUE (8.1) things will only improve from here.
      Rob.sharp
    • When the world class R&D

      concludes that Windows users are happy without the Start button, can it be qualidied as "world class"?

      They must be using Excel for their math, same as Zack and Reinhart & Rogoff. :-)
      Earthling2
    • Competition has better products and lower prices? Are you on the same

      planet that everybody else is?

      When it comes to WP8, neither Android nor iOS can even compare to the power and capabilities of WP8. And when it comes to devices, there aren't many out there better than the Nokia line and even the HTC line that are supported by WP8. When it comes to prices, that an immaterial category since, most smartphones lately are sold as part of a cell-phone package, and the price of the device is rolled up into the total package price.
      adornoe
  • Great spin but mistaken

    As long as Windows 8 handsets keep shipping, and the numbers keep rising Microsoft is happy. Of course the numbers seem bad now, because they're being compared to a year ago. Nokia is on the up thanks to the Lumia.

    Shipments up 25% for Lumia, lets see how well Apple did?
    Dreyer Smit
    • apple...

      I don't have the numbers for Q1 2013 for apple, but last year they sold 37 million iPhones and 15.7 millions iPads just in Q1. Assuming they sold 25% less this time round, that's still nearly 5 times as many iPhones than Lumias sold. I'm not going to even bother looking up the numbers for all the android sales.. there'd just be too many to count, though Samsung alone appears to have sold 70 million phones in Q1.

      Puts things in perspective really. Even Blackberry managed to sell 1 million phones Z10 this quarter.
      gbjbaanb2
  • A 27% increase in unit sales

    Nokia is showing a 27% increase in unit sales for Lumias from last quarter, and good revenue growth from China. I think they are doing pretty good actually. Not sure what the traders are expecting from Nokia or Apple for that matter.
    nishsingh
    • No - they are "shipped" units.

      Not actually sold.
      jessepollard
      • Yes!

        Every quarter they keep shipping units without a single one of them selling. They just keep shipping units because they need to support the shipping and transport industry. /s
        nishsingh
  • Are these articles sponsored?

    Poor article bud. You have written better.
    MovingOn.Pmb
  • How many businesses

    Only dream of sitting on 5 Billion in cash? I find it interesting that, even with loses, people are calling then dead. Look up sports teams, college football programs, etc. Outside of the very best lots of teams are actually bleeding money, too. Is the English Premier League talking about folding? Not a chance! You have revenue sharing in many US sports. Why? The small guys would be toast if they weren't getting assistance. Are pro sports in the US going any where? Nope. Nokia still has plenty of money while growing their Lumia line. I think that's a good thing long term. Microsoft has a bad stigma about them, Nokia's is actually a positive one. It would be cheaper to keep Nokia in business than trying to sell phones probably at cost as Microsoft so people might be willing to buy them.
    ikissfutebol
  • Headline doesn't make sense

    "Analysts were expecting between 4.8 and 5.8 million"... "Lumia shipments were 5.6 million".
    And yet your headline says "Worse than expected".
    Am I missing something?
    Mr Spoon
    • There are more than just Lumias

      And the results are terrible, but you are right Lumia sales are not so terrible,
      AleMartin
  • So I WAS WRONG.

    Nokia results are terrible, they keep on loosing market at an incredible speed.
    But I confess I was expecting Lumia sales to be a complete disaster and they were just bad.
    Sadly Nokia is getting smaller and smaller, they are losing in almost every single area.

    I still don't think Lumia is going to be a success, or even so-so. Nokia tried hard to push their new line of smartphones into markets where they were very big for a long time, but if we look at the numbers on those markets we can see they are going down insanely fast.
    Nokia managed to replace some symbian devices by a brand new Lumia, but I wonder if Lumia devices will be able to win new (not traditional Nokia) buyers in any significant number.

    As expected they are still losing money - the previous quarter profit, that many raved about, was due to things like the sell of their headquarters, stocks are going down for sure.
    AleMartin
  • Graph

    Nice job making a graph of Nokia's stock price that, though down only 12%, makes it look like the price dropped 90%.
    FDanconia
    • They usually are like that

      If you look at stock price graphs they are like that - sometimes the scale can be deceiving.
      AleMartin
  • This is a turning point for Nokia

    Let's consider a few things:

    1) Windows Phone 8 and the Lumia 920 (the current flagship WP) were only just launched in Q4 2012 (just 6 months ago)
    2) WP7 devices (800 and its variants) were intros to the WP platform as WP7 was just a transitional OS on the way to WP8
    3) Nokia just introduced its lower priced WP8 handsets (the 520 and 720) at Mobile World Congress in February of this year, along with a couple of new Asha phones, so these devices haven't had time to make any impact to sales, but they will be a factor for Q2 forward
    4) In the US, the Lumia 920 on AT&T is really the only meaningful WP8 handset at the moment, but with the 928 soon to be released on Verizon Nokia should see a nice pick-up in US sales

    Certainly Nokia isn't out of the woods, but given the success they have had in such a relatively short time with WP8 and Lumia, I think the future holds material upside for those with patience.
    jmagzdnet