Nokia's Q2 of 2011 very challenging

Nokia (OMX: NOK1V) has been beaten down so low that even a seemingly bad quarterly report was initially well received by the markets. Net sales were 9.3 billion Euros and reported EPS was minus 10 cents a share. The interim report was published half an hour after scheduled due to ’technical difficulties’. Nokia is now trading up slightly less than 4% at 4.22 Euro a share.

CEO Stephen Elop said that challenges brought on by the strategic transformation were greater than anticipated in Q2. He believes that positive impact of those changes can already be seen in the underlying health of the company’s business. Nokia cut prices aggressively in China and Europe to be able to sell out inventories.

Kauppalehti calculated that Nokia lost its market leader position in smartphones to Apple in Q2. Long overdue dual SIM card product launch has been well received. Nokia is targeting to end this year with more net cash and liquid assets than it has at the end of Q2 2011, which would mean above 3.9 billion Euro of such assets. Nokia expects operating margin of Devices & Services to be slightly above breakeven and Nokia Siemens Networks operating margin to be between minus three and zero percent. More information is available here.