Nokia Q2 darker than expected: Heavy losses, poor sales

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."