Nokia suffers smartphone slowdown in Q3 2011 as sales dip 13% to €8.98 billion

Shipments fall 27% as firm waits on Windows Phone

Nokia suffers smartphone slowdown in Q3 2011 as sales dip 13% to €8.98 billion
| Nokia financial news

Nokia (NYSE: NOK) has published its Q3 2011 financials, revealing net sales of €8.98 billion ($12.41 billion), down 13 percent year-on-year.

Of this total, Nokia's Devices & Services division generated €5.39 billion ($7.45 billion), down 25 percent year-on-year.

Nokia also made a group operating loss of €71 million ($98 million), with both the NAVTEQ and Nokia Siemens Networks divisions posting losses of €45 million ($62 million) and €114 million ($158 million) respectively according to IFRS rules.

As is tradition, the company also published its operating figures in Non-IFRS form (similar to US non-GAAP) to display what it claims was the underlying performance of those groups, with profits by this measure coming in at €252 million ($348 million).

The big switch

Much of the slip can likely be put down to Nokia's pending transition from Symbian and MeeGo smartphone handsets to Windows Phone devices, due to be unveiled on October 26 at Nokia World in London.

During the quarter, Nokia shipped a total of 106.4 million mobile devices, down 3 percent year on year, but up 20 percent on the number the Finnish firm managed in Q2 2011.

Of that, smartphone shipments totalled 16.8 million, down 27.1 percent. As a result, Nokia is tracking just behind Apple, with the firm having shipped just over 17 million iPhones during its most recent quarter.

The average price per mobile device was €51 ($70), down from €65 ($90) in Q3 2010. The average price per smartphone also fell, from €133 ($184) to €131 ($181).

Nokia generated positive cash flow during the quarter of €852 million ($1.18 billion), up from €439 million ($606 million) last year.

A change will do us good

"I am encouraged by the progress we made during Q3, while noting that there are still many important steps ahead in our journey of transformation," said CEO Stephen Elop.

"During the third quarter, we continued to take the action necessary to drive the structural changes required for Nokia's long-term success.

"Additionally, I am encouraged by our progress around the first Nokia experience with Windows Phone, and we look forward to bringing the experience to consumers in select countries later this quarter. We then intend to systematically increase the number of countries and launch partners during the course of 2012."

Elop claimed future results will be impacted by fundamental structural changes at the company, which will see a total of 10,000 jobs cut between now and the end of 2012.

"The planned changes we have initiated are difficult but necessary in order to align the company to our strategy,” he concluded.

"In summary, in Q3 we started to see signs of early improvement in many areas, but we must continue to focus on consistent progress so that we can move Nokia through the transformation and deliver superior results to our shareholders."

The company ended the quarter with total cash and other liquid assets of €10.81 billion ($14.93 billion). This is up from €11.1 billion ($9.36 billion) at the end of June.

[source: Nokia]