While it is clear that Nokia’s (OMXH: NOK1V, NYSE:NOK) is still in a death spiral, it is not yet in the innermost circle. Second quarter 2012 result averted the worst. Sales were up 3% sequentially although down 19% year-on-year. Reported EPS was -0.38 EUR and non-IFRS number of -0.08 was close to expectations. Nokia Siemens Networks showed some life with non-IFRS operating margin peeking just above zero, even if reported number is still deep in the red.
The stock was up almost 7% going into the report, most likely on some profit taking from short sellers. Since the report it has held onto those gains and swiftly visited far higher as well. The closely followed Lumia sales of 4 million were somewhat better than anticipated. The company does however admit that third quarter is expected to be challenging, due to the transition period ahead of Windows Phone 8 launch. Feature phone business highlighted by the new full touch Asha phones are supposed to hold the fort for the time being.
Monetizing other assets such as location services and disposal of non-core assets gained speed. The company also filed a host of new patents and is seeking ways to gain more revenue from existing strong portfolio. Returning Devices & Services to cash flow positive is extremely critical. The net cash at the end of the quarter was 4.2 billion and gross cash 9.4 billion. This is lower due to 742 million Euros handed out as dividends that in hindsight might have been better to withhold. Considering geographies, the sold mobile devices slide was fastest in China and North America while Middle East & Africa and Latin America held best.
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