Nokia reports poor 2Q as devices slump


Nokia Group net sales for the first half of 2013 decreased 22% year on year

Nokia has reported a weak second quarter as it experienced low volumes of mobile phone sales.  Net sales for the quarter were down by almost a quarter year on year at 24%, while Nokia Group net sales for the first half of 2013 decreased 22% year on year.

Devices & Services Q2 net sales decreased 6% quarter on quarter to Euro 2.7 billion. Devices & Services achieved a second quarter non-IFRS operating margin of minus 1.2%, which was consistent with the earlier expectation for approximately negative 2%, plus or minus four percentage points.

Mobile Phones volumes for the quarter decreased 4% quarter on quarter to 53.7 million units, but demonstrated some signs of recovery in the latter part of the quarter, Nokia claimed.

However, Lumia sales overall went well, with Q2 volumes increasing by 32% quarter on quarter to 7.4 million units, reflecting strong demand from customers for a broadened Lumia product range.

Nokia Group achieved underlying operating profitability for the fourth consecutive quarter, with a Q2 non-IFRS operating margin of 5.3%, driven by strong performance of Nokia Siemens Networks. Nokia Group net sales in Q2 2013 were Euro 5.7 billion, down 3% quarter on quarter.

Nokia Group ended Q2 with gross cash of Euro 9.5 billion and net cash of Euro 4.1 billion. Nokia Siemens Networks' contribution to Nokia Group gross and net cash was Euro 2.5 billion and Euro 1.4 billion respectively. Yet Nokia Siemens Networks Q2 net sales decreased 1% quarter on quarter to Euro 2.8 billion.

HERE achieved Q2 non-IFRS operating margin of 3.4%, up 8% quarter on quarter. This exceeded the earlier expectation for a negative non-IFRS operating margin.

Commenting on the second quarter results, Stephen Elop, Nokia CEO, said: 'In Devices & Services, our Mobile Phones business unit started to demonstrate some signs of recovery in the latter part of the second quarter following a difficult start to the year.

'Overall, Lumia volumes grew to 7.4 million in the second quarter, the highest for any quarter so far and showing increasing momentum for the ecosystem. During the third quarter, we expect that our new Lumia products will drive a significant part of our Smart Devices revenue.'


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