Nokia in red; reports Q3 loss of euro 559 mn

Hit by hefty impairment charges and declining sales, Finnish mobile phone maker Nokia Corp plunged into a loss of euro 559 million in third quarter of this year.

In the year-ago period, the company had a net profit of euro 1.08 billion, Nokia said in a statement.

The company's net sales decreased to euro 9.81 billion in third quarter of 2009 from euro 12.23 billion in the same period last fiscal.

Nokia Siemens Networks, a 50:50 joint venture of Nokia Corp and German Siemens AG, had suffered non-cash asset impairment charges of euro 908 million and euro 29 million for restructuring and other one time charges.

The JV firm registered net sales of euro 2.8 billion, down 21 per cent from the same period last year and also witnessed a 14 per cent decline from the second quarter.

"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. Challenging competitive factors and market conditions in the infrastructure and related services business necessitated non-cash impairment charges at Nokia Siemens Networks," Nokia CEO Olli-Pekka Kallasvuo said.

In the third quarter 2009, the total mobile device volumes of Devices & Services group were 108.5 million units, representing a decline of 8 per cent year-on-year (y-o-y) and 5 per cent increase on sequential basis.

In Devices & Services segment, the company witnessed that net sales were down year-on-year in all geographic areas. During the quarter, net sales declined 20 per cent to euro 6.9 billion.

"Our year on year market share was higher in Europe, Latin America and Middle East & Africa. This was offset by lower market share in Greater China, Asia-Pacific and North America," Nokia said.

In geographical area, Latin America was worst performer in terms of overall sales, the company sales fell by 31 per cent to euro 727 million, while in  Asia Pacific the sales stood at euro 2.04 billion, declining by 25 per cent from the third quarter of 2008.

In its outlook for the fourth quarter this year, Nokia expects its share in mobile device market to remain at the same level sequentially.

The company also projected a fall in industry mobile device volumes to 1.12 billion units in 2009 from about 1.21 billion units Nokia estimated for last year.

Total cash and other liquid assets of the company were euro 7.4 billion at September 30, compared with euro 7.2 billion in the previous year.