Nokia still struggling to reverse plunging sales

Bloomberg Stockholm

Nokia, the Finnish cellphone maker struggling to reverse plunging sales, reported a sixth consecutive quarterly loss yesterday as its year-old Lumia smartphones failed to gain ground from the iPhone and Android devices.

Third-quarter net loss widened to e969 million (R11 billion) from e68m a year earlier, Nokia said. Analysts predicted a loss of e657m, in the average of estimates compiled by Bloomberg. Lumia sales fell to 2.9 million units from the previous quarter’s 4 million.

Chief executive Stephen Elop is trying to halt a decline in revenue, which has shrunk by a third since he overhauled Nokia’s strategy in early 2011 to bet on handsets using Microsoft’s Windows software.

He has cut more than 20 000 jobs and closed production and research sites as his strategy has failed to stem user losses to Apple’s iPhone and devices running Google’s Android operating system.

Revenue declined 19 percent to e7.24bn, compared with the e7bn average analyst estimate.

Excluding some items, the company reported an operating profit as losses in the devices business narrowed from the previous quarter, when measured as a percentage of sales.

Nokia rose 3.6 percent to e2.28 at 1.12pm Helsinki time yesterday. The stock had tumbled 42 percent this year to yesterday, trading at 1996 levels.

Nokia has lost almost 90 percent of its market value since Apple introduced the iPhone in 2007.

Nokia’s net cash declined to e3.6bn from e4.2bn at the end of June. Its cash reserves have shrunk by half in the past five years and will fall below e3bn by year-end, Standard & Poor’s predicted in August. Nokia’s debt is at junk status with the three main rating companies.

Lumia sales fell as customers waited for the first Nokia models running the new Windows Phone 8 software, set to go on sale this quarter.

Analysts had predicted 2.93 million Lumias sold, according to the average of six estimates by Bloomberg.

Nokia sold 6.3 million smartphones and 76.6 million basic phones during the three months to September. Analysts predicted sales of 6.84 million smartphones and 74.6 million basic phones.

Nokia, which controlled more than half of global smartphone sales before the first iPhone and Android devices were introduced, last year jettisoned its home-made Symbian software in favour of Windows.

Smartphones running the Microsoft program have failed to threaten Apple and Google’s lead, having a market share of 2.7 percent in the second quarter, compared with 83 percent for the iPhone and Android devices combined, according to Gartner.