Nokia has solid Q1 2011 with sales up 9% to €10.4 billion

But profits down 10% and market share sliding fast

Nokia has solid Q1 2011 with sales up 9% to €10.4 billion
| Nokia financial news

Nokia (NYSE: NOK) has announced its Q1 2011 financials for the three months ending March 31.

Net sales were €10.4 billion ($15.2 billion), up 9 percent year-on-year.

Of this total, Nokia's Devices & Services division generated €7.1 billion ($10.4 billion), up 6 percent year-on-year.

Group operating profit was €439 million ($641 billion), down 10 percent compared to Q1 2010.

Devices & Services accounted for €690 million ($1.0 billion), down 17 percent. Other divisions NAVTEQ and Nokia Siemens both made substantial operating losses due to reorganisation and intangible asset amortisation.

For that reason, Nokia also listed its operating figures in Non-IFRS form (similar to US non-GAAP) to provide what it said was the underlying performance of those groups.

The hard road

During Q1, Nokia sold a total of 108.5 million phones, up 1 percent year-on-year. It estimated its share of the global phone market dropped from 33 percent a year ago to 29 percent.

Smartphone sales were 24.2 million units, up 13 percent; or 26 percent of the total global smartphone market, down from 41 percent in Q1 2010.

Latin America and China were the growth areas for handset sales.

The average price per device was €65 ($95), up from €62 ($91) in Q1 2010.

Smartphone average price dropped however from €155 ($226) to €147 ($215). In comparison, the average revenue Apple generates per iPhone sold is over $600.

Nokia generated negative cash flow during the quarter of €173 million ($252 million), compared to a positive cash flow of €182 million ($266 million) last year.

There maybe (more) trouble ahead

"In the first quarter, we shifted from defining our strategy to executing our strategy. On this front, I am pleased to report that we signed our definitive agreement with Microsoft and already our product design and engineering work is well under way," commented CEO Stephen Elop.

"Following a solid first quarter, we expect a more challenging second quarter. However, we are encouraged by our roadmap of mobile phones and Symbian smartphones, which we will ship through the balance of the year.

"We are fully focused on delivering the needed accountability, speed and results to positively drive our future financial performance."

The company ended the quarter with total cash and other liquid assets of €11.1 billion ($16.2 billion). This is down from €12.2 billion ($17.8 billion) at the end of December.

[source: Nokia]