Nokia Loses €1.34 Billion In Q1 2012

Nokia has reported a first quarter operating loss of €1.34 billion (£1.1bn), citing “greater than expected competitive challenges” and restructuring costs as the main causes.

Net sales revenue for the first three months of 2012 amounted to €7.35 billion (£6bn), 29 percent less than the same period last year (€10.4bn) and 26 percent less than revenues in Q4 2011 (€10bn).

Global sales drop

“We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly,” Nokia CEO Stephen Elop said in a statement. “Over the last year we have made progress on our new strategy, but we have faced greater than expected competitive challenges.”

Among the contributing problems within the Finnish company, Elop highlighted the mixed sales results of the Lumia range. Having launched four handsets aimed at different price ranges, Nokia’s Windows Phone offerings have struggled to make in impact in the UK and some other markets, though results in the US have “exceeded expectations” despite a hiccup with the Lumia 900.

Nokia’s poor performance outside of the US is most glaring in China, where the company faces stiff competition from Apple and domestic manufacturers including ZTE and Huawei. Year-on-year sales have fallen 70 percent from €1.9 billion (£1.55bn) to €577 million (£471m).

Elop said that Nokia was pursuing urgent changes to address customer concerns, broaden markets and increase advertising.

“We are confident in our strategy and focused on responding urgently in the short term and creating value for our shareholders in the long term.”

Nokia also revealed today that Colin Giles, the executive vice president of sales, would be leaving the company to spend more time with his family. His role will not be filled as the company plans to restructure and reduce a layer of sales management.

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