Nokia Losses Hit €1.41bn
Sales down 19 percent from last year despite modest increase from last quarter
Nokia recorded losses of €1.41 billion (£1.1bn) in the second quarter of 2012, up from the €1.34 billion it sustained in the previous quarter.
Its latest financial results also revealed that despite a minor increase in quarter-on-quarter sales, they had decreased by 19 percent from this time last year. Net sales were up from €7.4 billion to €7.5 billion, but were far less than the €9.3bn it recorded in the second quarter of 2011.
CEO Stephen Elop has acknowledged that it was a “difficult quarter” and that restructuring would continue during this “difficult period.”
“Nokia is taking action to manage through this transition period,” said Elop. “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.”
One bright spot for Nokia was that sales of its Lumia Windows Phone devices increased to four million units, but analysts have lowered their sales estimates following the announcement that Windows Phone 8 will not be coming to any older models of the Lumia range.
This was believed to be one of the reasons for Nokia halving the price of its flagship Lumia 900 in the US earlier this week, just three months after it launched. Nokia told TechWeekEurope that this was a normal strategy at this moment in a product’s lifecycle.
Last month, the troubled manufacturer announced that it was going to reduce its workforce by around 10,000 employees and is closing factories in Germany and Canada, while its factory in Salo, Finland will also be shut, leaving just a research and development facility there.
“We are executing with urgency on our restructuring program. We are disposing of non-core assets like Vertu,” said Elop. “We are taking the necessary steps to restructure the operations of the company, which included the announcement of a new program on 14 June. Faster than anticipated, we have already negotiated the closure of the Ulm, Germany R&D site, and the negotiations about the planned closure of our factory in Salo, Finland are proceeding in a collaborative spirit.”
How much do you know about smartphones? Take our quiz