Nokia: Lumia's U.S. Success Not Repeated Worldwide


Helsinki, Finland - Sales of Nokia's Lumia Windows smartphones have exceeded expectations in the U.S., but have posted mixed results worldwide, the company said in announcing its first-quarter 2012 financial report.

In North America during the quarter, Nokia's handset sales rose sequentially in units and dollars following the launch of the company's first Lumia smartphones, but worldwide handset sales slumped on a sequential and year-ago basis.

In Nokia's cellphone devices and services group, worldwide sales fell 40 percent to 4.25 billion Euros ($5.6 billion). The group also swung to an operating loss of 219 million Euro ($287.5 million) compared to four consecutive quarters of operating profits in 2011. In 2011, the group's full-year operating profits came to 884 million Euros ($1.16 billion), down 75 percent.

The company blamed its continuing cellphone losses on "greater than expected competitive challenges and seasonality" but primarily on restructuring charges.

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

As a result, "We have a clear sense of urgency to move our strategy forward even faster," he said. "The company is "confident in our strategy and focused on responding urgently in the short term and creating value for our shareholders in the long term."

Nokia also plans to "accelerate and substantially deepen [cellphone handset and service] cost savings, consistent with our strategic focus," he added. That focus includes a greater emphasis on smartphones in general and Windows Phone smartphones in particular while continuing to offer Symbian-based smartphones and feature phones.

In North America, sales of handsets and related services rose sequentially by 75 percent in dollars to 93 million Euros ($122.1 million), though they were off 34 percent compared to the year-ago quarter.

Unit handset sales in North America rose sequentially by 20 percent to 600,000 units but were off 50 percent from the year-ago 1.2 million.

Worldwide, handset and services revenues fell 29 percent on a sequential basis and 40 percent on a year-over-year basis.

Nokia's consolidated revenues, including location-based services and network infrastructure, fell 29 percent to 7,354 million Euros ($9.7 billion) in the first quarter, and operating losses hit 1,340 million Euros ($1.76 billion) compared to a year-ago profit of 439 million Euros.

Currency conversions were based on a rate of $1.31 to the Euro.


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