Mobile phone giant Nokia has announced a surprise loss for its third quarter as a result of goodwill charges on Nokia Siemens Networks.
The Finnish firm reported an operating loss for the third quarter of €426m, compared with an operating profit of €1.5bn reported in the third quarter 2008.
Nokia’s Q3 results were hit by a €908m goodwill impairment charge on its joint venture with Siemens, Nokia Siemens Networks. Third-quarter sales at the unit also fell 21pc year-on-year to €2.8bn.
Third-quarter net sales of €9.8bn were down 20pc year-on-year. However, net sales totalling €6.9bn in Nokia’s Devices & Services division showed a 5pc increase when compared with the previous quarter, although they were down 20pc year-on-year.
Nokia shipped 108.5 million mobile devices during the quarter, which was down 8pc year-on-year but up 5pc on the amount shipped in the previous quarter.
The Finnish group estimates that its mobile market share remained steady in the third quarter at 38pc, the same level as in Q3 2008 and in Q2 2009.
Mobile device demand improving
Nokia also raised its outlook for mobile-phone industry volumes in 2009. It now expects mobile device volumes to fall by 7pc to 1.12 billion units in 2009, compared to its previous forecasts of a 10pc drop.
“The demand for mobile devices improved in many markets during Q3,” said Nokia CEO Olli-Pekka Kallasvuo.
“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,” he said.
“The challenging competitive factors and market conditions in the infrastructure and related services business necessitated non-cash impairment charges at Nokia Siemens Networks. We continue to support Nokia Siemens Networks actions to improve its performance,” Kallasvuo noted.
Article courtesy of businessandleadership.com
Photo: Nokia CEO Olli-Pekka Kallasvuo.