Nokia Reports Smaller Loss as Sales Beat Estimates
Nokia Oyj (NOK1V) reported a smaller-than- estimated loss and forecast the handset business to be profitable this quarter as the Finnish manufacturer prepares to introduce models based on Microsoft Corp.’s software. The shares surged.
The third-quarter net loss was 68 million euros ($94 million), beating the 229 million-euro average loss estimate by 22 analysts compiled by Bloomberg. Sales declined 13 percent to 8.98 billion euros as handset shipments dropped 3 percent to 106.6 million units, Espoo, Finland-based Nokia said in a statement today. Analyst predicted sales of 93.6 million phones.
Chief Executive Officer Stephen Elop is set to introduce a smartphone line based on Microsoft’s Windows Phone software at the Nokia World event in London next week. In moving to the new platform, the company accelerated the decline of the 10-year-old Symbian device family, which has been losing market share to Apple Inc. and Google Inc.
The results “indicate that our sales execution and channel inventory situation have improved,” Elop said in the statement.
Nokia jumped as much as 8 percent in Helsinki trading after the announcement and traded at 4.76 euros, or 6.3 percent higher, as of 1:06 p.m. local time.
Nokia said in February that the transition to Windows Phone as its main handset platform would start this year, with large volumes coming next year. It rolled out two more Symbian software releases and seven Symbian handsets before outsourcing support of the older system to Accenture Plc last month.
Market Share Loss
The world’s largest handset maker since 1998 with market shares as high as 40 percent, Nokia had a 22.8 percent share in the second quarter, according to researcher Gartner Inc. It fell to third place in smartphone sales to carriers and resellers as Apple and Samsung Electronics Co. passed it for the first time in the quarter, Strategy Analytics said.
Apple sold 17.07 million iPhones in the third quarter. Last week, it set a record of selling more than 4 million iPhone 4S devices over the debut weekend.
Elop, 47, has said Nokia will continue selling Symbian devices and upgrading the software through 2016. The former Microsoft executive set a target in February of selling 150 million additional Symbian handsets. The company is also investing to refresh its low-end handsets, which have declined as Asian manufacturers churn out smartphones running Google Inc.’s Android priced less than $100.
Last month, Nokia said it plans to close a factory in Romania that produces low-end handsets for Europe. It also started a review of its factories in Finland, Hungary and Mexico, and expanded job cuts to about 7,500 in total.
Nokia Siemens Networks, the phone-equipment venture with Siemens AG (SIE), posted a third-quarter operating loss of 114 million euros. The parents said Sept. 29 that they would inject 1 billion euros into the company.
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