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Nokia loss reduced more than expected

Thursday, 19 July 2012
The Finnish mobile phone giant Nokia reported a loss before tax of €878 million, about Skr7.5 billion, for the second quarter. This compares with a loss of €544 million the same period in 2011

Analysts had on average expected results with a loss of €923 million, according to Reuters.
Turnover amounted to €7.542 billion, compared to €9275 million a year earlier and the average forecast of €7.378 billion.

For Nokia's largest business segment, Devices & Services, sales fell by 26 percent to €4.023 million. Operating margin, excluding special items, was 9.1 percent, compared with 7.3 percent a year earlier.

Nokia shipped 83.7 million handsets during the quarter, up 1 percent compared with the previous quarter but down 5 percent from the same period 2011.  Analysts' expectations for supply were an average of 800 million units.

The number of smartphones shipped was 10.2 million, 14 percent fewer than the previous quarter and 39 percent fewer than in the second quarter last year.

While Nokia's net cash position of EUR 4.2 billion at the end of the quarter, up 8 percent compared with last year, surprised positively.

Nokia expects that the operating margin for Devices & Services will reach similar level during the third quarter as in the previous quarter, plus or minus four percentage points.

The Company anticipates that third quarter will be "challenging" in terms of smartphones, given the shift in the product portfolio.

Nokia has sold 4 million copies of smart phones in the new series Lumia, which uses Microsoft's Windows operating system.

The joint venture Nokia Siemens Networks ( NSN), which competes with Swedish Ericsson, saw sales declined by 8 percent to €3.343 million. Operating margin, excluding special items, was 0.8 percent (1.1). Margin for the NSN is expected to rise during the third quarter.

The objectives of Nokia's cost savings are the same as before.
"We are implementing our restructuring program with urgency," the Nokia Chief Stephen Elop said in the interim report.

Shares rose by almost 15 percent on the Stockholm Stock Exchange after the report was released. The increase slowed down but after a few minutes, Nokia was at plus 7.8 per cent when the clock by mid day.
by Team

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