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Nokia Quarterly Profits Down by Two-Thirds

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Nokia has reported a 66% drop in second quarter profits to EUR380 million (USD535 million) as sales of handsets declined in global recession. Sales dropped by a quarter to EUR9.91 billion (USD13.9 billion). Nokia continues to expect 2009 industry mobile device volumes to decline approximately 10% from 2008 levels, which accords with the expectation that Sony Ericsson reported in its Q2 results.

Nokia's CEO, Olli-Pekka Kallasvuo said: "Nokia put in a solid performance in what was another tough quarter. We increased our share of the global mobile device market sequentially to an estimated 38% and grew our smartphone market share to an estimated 41%. As a result of strong operational execution, underlying operating margins improved sequentially in all segments. Competition remains intense, but demand in the overall mobile device market appears to be bottoming out. As before, we are continuing to tightly manage our operating expenses."

In the second quarter 2009, Nokia shipped 103.2 million mobile phones, representing a decline of 15% year on year and an 11% increase sequentially. Nokia volumes benefited sequentially from a more stable inventory situation in the operator and distributor channels. Nokia's mobile device market share was an estimated 38% in the second quarter 2009, down from 40% in the second quarter 2008 and up from 37% in the first quarter 2009.

Nokia Handset Sales by Region

(million units)

Q2/2009

Q2/2008

YoY Change

Q1/2009

QoQ Change

Europe

23.3

27.1

-14.0%

22.3

4.5%

Middle East & Africa

18.9

21.1

-10.4%

14.8

27.7%

Greater China

18.6

17.6

5.7%

17.9

3.9%

Asia-Pacific

30.3

36.4

-16.8%

28.2

7.4%

North America

3.2

4.5

-28.9%

3.4

-5.9%

Latin America

8.9

15.3

-41.8%

6.6

34.8%

Total

103.2

122.0

-15.4%

93.2

10.7%

Nokia said that its year on year market share decline was driven primarily by lower market share in Latin America, Asia-Pacific and North America. This was partially offset by a slightly higher market share in Greater China, Europe and Middle East & Africa. Sequentially, the company's market share declined in North America, but this decline was more than offset by its increased market share in Middle East & Africa, Greater China, Europe, Asia-Pacific and Latin America.

Nokia Siemens Networks

Second quarter 2009 net sales decreased 21% to EUR 3.2 billion, compared with EUR 4.1 billion in the second quarter 2008, reflecting challenging market conditions and competitive factors. At constant currency, Nokia Siemens Networks net sales would have decreased 20%.

Nokia Siemens Networks Sales by Region

EUR million

Q2/2009

Q2/2008

YoY Change

Q1/2009

QoQ Change

Europe

1, 209

1, 412

-14.4%

1, 097

10.2%

Middle East & Africa

459

553

-17.0%

436

5.3%

Greater China

353

413

-14.5%

284

24.3%

Asia-Pacific

648

1, 076

-39.8%

692

-6.4%

North America

208

158

31.6%

169

23.1%

Latin America

322

455

-29.2%

312

3.2%

Total

3, 199

4, 067

-21.3%

2, 990

7.0%

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