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Nokia Swings into Quarterly Loss on NSN Write-Down
Nokia has swung into a 3rd quarter loss after it wrote down the value of its Nokia Siemens Networks joint-venture. Nokia reported a EUR559 million (US$836 million) loss after taking write-downs of EUR1.17 billion (US$1.74 billion) - mostly on a EUR908 million impairment at Nokia Siemens Networks - and a 20% drop in sales to EUR9.81 billion (US$14.6 billion).
Devices & Services net sales were EUR 6.9 billion (US$10.3 billion), down 20% year on year and up 5% sequentially (down 20% and up 6% at constant currency). Devices & Services gross margin was 30.9%, down from 34.0% in Q2 2009.
Nokia shipped 108.5 mobile phones, down 8% year on year and up 5% sequentially. Nokia estimates that its mobile device market share was 38% in Q3 2009, at the same level as in Q3 2008 and in Q2 2009.
Nokia Siemens Networks net sales of EUR 2.8 billion (US$4.2 billion), down 21% year on year and down 14% sequentially (down 20% and down 14% at constant currency).
Olli-Pekka Kallasvou, Nokia's CEO commented: "The demand for mobile devices improved in many markets during Q3. With the average selling price of our devices holding firm quarter-on-quarter, our higher device volumes translated into increased net sales in our Devices & Services business. Our volumes and net sales were, however, somewhat constrained by component shortages we encountered across the portfolio. I also want to highlight the good operating expense management that helped the segment deliver solid earnings.
The challenging competitive factors and market conditions in the infrastructure and related services business necessitated non-cash impairment charges at Nokia Siemens Networks. We continue to support Nokia Siemens Networks actions to improve its performance."
Nokia Mobile Phone Volumes by Geography
| (million units) | Q3 2009 | Q3 2008 | YoY Change | Q2 2009 | QoQ Change |
|---|---|---|---|---|---|
| Europe | 27.1 | 27.4 | -1.1% | 23.3 | 16.3% |
| Middle East & Africa | 19.6 | 21.5 | -8.8% | 18.9 | 3.7% |
| Greater China | 18.5 | 19.8 | -6.6% | 18.6 | -0.5% |
| Asia-Pacific | 30.5 | 33.6 | -9.2% | 30.3 | 0.7% |
| North America | 3.1 | 4.5 | -31.1% | 3.2 | -3.1% |
| Latin America | 9.7 | 11.0 | -11.8% | 8.9 | 9.0% |
| Total | 108.5 | 117.8 | -7.9% | 103.2 | 5.1% |
Looking ahead, Nokia says that it expects industry mobile device volumes in the fourth quarter 2009 to be up sequentially. Nokia a;so expects that industry mobile device volumes to be approximately 1.12 billion units in 2009, down approximately 7% from approximately 1.21 billion units Nokia estimated for 2008. This is an update to Nokia's earlier estimate of industry mobile device volumes declining approximately 10% in 2009 from 2008 levels.
Posted to the site on 15th October 2009