Nokia has just posted its Q1 2012 financial reports, noting an operating loss of €1.3 billion that led to a net loss of €590 million for the period. The company earlier warned that it would not be able to maintain its earlier forecast resulting into huge damage. Nokia sold 11.9 million smart devices during Q1, which is less than half of the 24.9 million it achieved in the first three months of 2011. Operating losses from the Smart Devices and Services division alone amounted to €219 million, equivalent to a -5.2 percent operating margin.
Financial and Operating Highlights:
- Q1 2012 net sales of EUR 7.4 billion (Q1 2011: EUR 10.4 billion)
- Non-IFRS EPS of EUR -0.08 and reported EPS of EUR -0.25
- Losses incurred due to greater than expected competitive challenges and seasonality; reported losses also primarily driven by charges related to restructuring activities
- Implementation of smartphone strategy proceeding:
- Expansion of Lumia portfolio to cover higher and lower price points (Lumia 900 and Lumia 610 announced in Q1)
- Expansion of geographic coverage to 45 countries currently (31 new countries in Q1)
- Encouraging launch of Lumia 900 with AT&T in US in April
- Renewing feature phone portfolio with 7 new Asha products ramping up
- Taking action to drive improvements in the trajectory of Lumia sales and to support feature phone sales
- Plans to accelerate and substantially deepen Devices & Services cost savings, consistent with strategic focus. Nokia will share further details as quickly as possible.
- Balance sheet remains strong with EUR 9.8 billion of gross cash at end-Q1; EUR 4.9 billion of net cash at end-Q1
- Estimates that current annual IPR royalty income run-rate is approximately EUR 0.5 billion