Nokia Q2 darker than expected: Heavy losses, poor sales

Nokia Q2 darker than expected: Heavy losses, poor sales

Summary: Nokia's second quarter results show the phone maker has reported a massive operating loss as the company continues to sink amid increasing pressure from rivals.


The beleaguered phone maker Nokia reported a $1 billion operating loss on $9.23 billion in net sales in its financial results for the second quarter 2012.


Analysts expected a loss of €340 million ($420m) on revenue of €7.53 billion ($9.27bn). Nokia reported net sales of €7.5 billion ($9.23bn), up from €7.4 billion ($9.11bn) in the first quarter.

Mobile phones volumes increased quarter-on-quarter and year-on-year to 73 million units, according to Nokia. Analysts predicted that the Lumia model would sell approximately 4 million units, and the financial results have confirmed this -- sales increasing over the financial period.

According to the results, the sale of devices and services decreased 5 percent quarter-on-quarter.

The company ended Q2 with a gross cash level of €9.4 billion ($11.5bn) and net cash of €4.2 billion ($5.17bn), down from €4.87 billion last year.

The liquid assets of the Finnish company have lowered quarter-on-quarter, after €742 million ($912m) is paid out in annual dividend payment to shareholders.

Nokia chief executive Stephen Elop commented on the results:

"Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources.

We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products over time, well beyond the launch of Windows Phone 8.

We believe the Windows Phone 8 launch will be an important catalyst for Lumia. During the quarter, we demonstrated stability in our feature phone business, and enhanced our competitiveness with the introduction of our first full touch Asha devices."

The company's prepared statement says that while "Q3 will remain difficult, it is a critical priority to return our Devices & Services business to positive operating cash flow as quickly as possible."

Topic: Nokia

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  • A Self-Inflicted and likely mortal wound

    How are Nokia shareholders not rebelling against a 'strategy', if you can call it that, of steering right off the cliff? Unlike RIM's fortunes, which could just attribute to wilfull neglect and clumsiness, Nokia made a deliberate decision to shoot itself in the head. Elop, you're a dunce.
  • It is time for Elop to Goooooooooooooo

    Actually, it was time for Elop to go when he walked in the door! marlinspike asked how Nokia shareholders are not rebelling. Well, I am a nokia shareholder and I WANT ELOP OUT! First, I liked symbian and while I believed there was room for improvement, I liked that symbian WASN'T from Apple, Microsoft, or Google. So, ditching Symbian was strike 1. Then, picking the weakest phone OS (windows) and going with it exclusivly was strike 2! I don't think it would have been wrong to do a few windows phones, and a few android phones, but to only do Windows??? Idiot! Finally, in the US Elop abandoned all of the true Nokia faithful. Instead of building on the support they had in the US, Elop conducted a scorch and burn policy, destroying any remaining loyalty in the US to the Nokia brand and trying to start from scratch. Strike 3 and you're OUT!

    It's really sad when you think about it because Nokia was a great mobile company. The quality of their products was respectec above all others! Elop destroyed that by shifting more and more to chinese production and cheaper materials. Nokia phones were innovative, giving us features that other phones only dreamed of. But, this was largely possible because they used thier own OS and could make the necessary changes quickly to support those features. Now that they are in bed with Windows, they can't add features that Windows doesn't support. This was one reason the Lumina phones are so plain Jane! It's also why the pureview was released on Symbian Belle and not as a windows phone. But who wants to buy a phone with such a great camera when nokia is making it in china, with plastic instead of a solid aluminum shell, running an OS that Nokia is barely supporting, and for $700?

    Finally, the most short sited step Elop took was to get rid of all the real talent. Nokia was always inovative, so, getting rid of those that are inovative is like ripping ones soul out! Even if Nokia does survive, they have lost their soul and their identity.
    • I have to agree...

      with your comments. Meego still has life it it if Nokia would allow it (Qt development environment compatible with Symbian also, which means apps are there and available). From what I understand there is even a Qwerty N9 (I believe it is called the 950) that might entice fans of Blackberries who prefer a Physical Qwerty device. Nokia must make the decision to abandone the Windows Phone Only moving forward strategy before it is too late (I think it is nearly too late now). They could price the N9 and 950 aggressively to regain some market and developers and possibly turn around the cmopany. They do not have to abandone Windows Phone, but to blindy go ahead as they currently are shows no signs of a success.
  • Hear the Lamentations of their women!

    Just you wait! Slowly but surely, bit by bit, Windows Phone is mowing down the competition! Soon there will be Windows 8. And then Windows 9! When Windows 10 arrives, the whole world will be bowing before Redmond! Victory is coming soon! It's just around the corner! Around the bend and over the hill! The curtain is rising! It'll be like Mango, Tango, and Rutabango all rolled into one! The best of all possible worlds, fast and fluid, with liberty and justice for all! Yay Microsoft!
    Robert Hahn
    • It may not be mowing them down.....

      But they sure have a great product that many don't know about! Many think its some Android version and others just have no clue. But those buying them are very happy and much more happy than Android users are with their devices and the only one that can match them in customer satisfaction is the iPhone. Give it time, I don't even think its been a year yet that Nokia has released its Windows Phone devices.
      • Microsoft has a dead-end product

        That nobody (outside the delusional Microsoft Fanboys) wants. It's been 7 months, or close to 7 months, and Nokia is still losing marketshare. I'm sure the Announcement, it took Microsoft three months to clear up, didn't help too much. No matter how many Astroturfers Microsoft unleashes (William "toddbottom3" Farrel, Schleprock Davidson, OhTheHumanity, etc.), they can't change the Fact that WP 7 (WM 7.x) is a huge stinky turd.
        Jumpin Jack Flash
        • And....

          Thanks for your opinion. Everything Microsoft does is crap to you, so its not as though I will listen to your dribble here. As I say, you could take your most favorite device that you use and if Microsoft had released it, you would call it crap and never touch it, so point is, you really are not objective at all and just rant with your hatred. Not really someone that anyone is going to listen to!
  • Nokia Q2 darker than expected: Heavy losses, poor sales

    Losses were expected during the transition. I don't know about poor sales considering they were #1 on AT&T and Amazon when the Lumia 900 was released.
    Loverock Davidson-
  • Sales are picking up...

    bloggers seems to have no other story today except to pick on nokia...
    • They have been doing that for a while now......

      Seems every other tech article the past few weeks has been about Nokia going down tomorrow and won't have a chance! These idiots also don't realize that the actual loss leaving out the massive restructuring costs is about $300 - $400 million. Not $1.74 billion like they seem to think is the real number. And is why their stock is up this morning. But hey don't let the facts get in the way of a great hit piece!
      • Here you go....

        Third paragraph from the bottom.
  • Another biased article...

    IDC analyst Francisco Jeronimo noted “Nokia’s quarterly loss was less than expected, and the volumes of its basic feature phones are increasing, which is a good sign. The results on Lumia show that the company’s turnaround strategy, which is a long-term project, could succeed.”

    “Nokia has been in free fall in recent quarters, and while it is not out of the woods yet, it does seem as if it is pretty close to the bottom,” added Canalys analyst Pete Cunningham.

    Nokia currently has cash reserves of €4.2 billion, down from €4.9 billion in Q1 2012, but much better than the €3.7 billion analysts predicted.

    Nokia shares are up as much as 15% on the earnings news.
    • 15% on earnings?

      15% on $1.75. Too F'N funny!!
      Arm A. Geddon
  • Im Westen, nichts ist stille

    All the Nokia noise focuses on the smartphone war, failing to consider that Nokia is still the name for cell phones in Asia, Africa and elsewhere. Symbian lives on for feature phones in most of the world, where Nokia leads.

    As for the Nokia saga, the single-focus on Windows remains an open bet, with many more phones (not just Nokias) to launch as this OS comes into its scheduled maturity. Right now, it's not mature, but the Windows 8 cross-platform OS will come into play in 2013. Granted, this is a long time to wait, but at this point I would hang onto my shares. It gets better.
    Jim Brady
  • Really feel for what Nokia is going thru

    Nokia has upped its offering with the Lumia phones.. I think Hardware wise, the Lumia 900 is just as good as many other Android and iOS phones...
    And I think their choice of using windows Operating Systems is fine too - only, with so much changing in the Windows Phone OS space, they(Nokia) just have to wait a little longer.

    I really wish this legendary phone manufacturing company survives this lull and hangs in there to see brighter days - hopefully starting from the end of 2012.
  • Windows Phone (7 & 8) analagous to Zune

    Microsoft couldn't stand it that Apple was making money with iPod.

    So they answer with Zune. A case of an initial flawed offering, tepid reception, then another offering with some improvments. By that time, NO ONE CARED ABOUT THE IMPROVMENTS. The market had settled and the moment has passed them buy.

    Now Zune "lives" on, like an undead corpse shuffling amongst XBox live software, unloved and forgotten.

    The same market dynamic is in play here.