It should not come as a big surprise that Nokia’s (OMX: NOK1V, NYSE: NOK) numbers fell off a cliff on Q1 2012. Net sales were down 29% to 7.4 billion Euros. Devices & Services segment sales fell particularly fast in China with a 62% drop in volumes and 70% plunge in revenue. In other geographies sales were down around 30% with the exception of Latin America which held a little better. The company thinks that cheap Android phones have been the winner.
CEO Stephen Elop commented on Lumia sales. The picture he painted was mixed. The U.S. launch was touted where as traction in Great Britain appears to be particularly poor. The cheaper Lumia 610 will start rolling out in Asia from today and the company will start competing on price with the product line that it has bet the house on. More products will come to market during Q2 still, also including Asha line feature phones.
Non-IFRS EPS was -0.08 EUR and reported EPS -0.25 EUR. Restructuring costs are a part of the picture. Nokia is planning to accelerate cost savings and start to weed out non-core assets as the company is realizing the situation will quickly turn critical at this rate. As of the end of Q1 2012 there was still 9.8 billion Euros in gross and 4.9 billion net cash at hand. Nokia estimates that current annual IPR royalty income is about half a billion Euros.
The stock made a small jump right after the numbers, since the headline profit looked slightly better than what the robots were expecting following the recent profit warning. Once people started digesting the information, the stock returned to its downward path and is now once again languishing just below 3 Euros.
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