Nokia Admits $1.7bn Loss In Q1 2012

Nokia has announced its Q1 2012 financial results, with a huge €1.34bn ($1.7bn) operating loss despite sales of $7.4bn ($9.7bn) in sales. Smart devices sales more than halved year-on-year as Nokia's Symbian line lost traction, declining 38-percent from Q4 2011; meanwhile, mobile phones – the bread and butter of Nokia's bottom line – fell 32-percent year-on-year, and down 24-percent on the previous quarter. "We have faced greater than expected competitive challenges" CEO Stephen Elop admitted, adding that "actual sales results [of Lumia Windows Phones] have been mixed."

"We exceeded expectations in markets including the United States," Elop said of Lumia sales, "but establishing momentum in certain markets including the UK has been more challenging." Nokia blames "the strong momentum of competing smartphone platforms relative to our Symbian devices" for its decline in smartphone sales year-on-year, with lower seasonal demand  "which more than offset the sequential increase in Nokia Lumia device volumes" hurting them quarter-on-quarter.

Nokia warned of underwhelming performance earlier this month, when it said it had sold around 12m smartphones. In actual fact, according to the more accurate numbers today, the Q1 2012 figure is actually 11.9m. Two million of those were Lumia Windows Phones.

Meanwhile, Nokia received a "quarterly platform support payment" totaling £250m from Microsoft for the continued use of the platform. All in all, it makes for uncomfortable reading, Nokia's finances looking altogether shaky despite the company sitting on a reasonably full bank account.

Full Stephen Elop statement:

"We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly. Over the last year we have made progress on our new strategy, but we have faced greater than expected competitive challenges.

We have launched four Lumia devices ahead of schedule to encouraging awards and popular acclaim. The actual sales results have been mixed. We exceeded expectations in markets including the United States, but establishing momentum in certain markets including the UK has been more challenging.

At the same time, the lower price tiers of our industry are undergoing a structural change, and traditional feature phones are challenged by full touch devices. As a result we are taking deliberate measures to continue to renew our Series 40 platform, and we plan to strengthen our line-up in Q2 2012. We are making investments in our Mobile Phones business unit aimed at addressing the gaps in our offering.

We have a clear sense of urgency to move our strategy forward even faster. We are pursuing step function changes by having launched the Lumia 610 and Lumia 900 in the first quarter, expanding market coverage, increasing advertising, introducing key customer-requested features and broadening our most successful go-to-market activities. At the same time, we have focused our efforts in the low-end of smartphones and feature phone asset to drive improved business results and conserve cash.

We are confident in our strategy and focused on responding urgently in the short term and creating value for our shareholders in the long term."