Nokia’s problems mount as it reports dismal Q1 results

Nokia today reported a first-quarter operating loss of €1.34 billion (US$1.8 billion) on costs at Nokia Siemens Networks (NSN)

The loss was burdened by €1.1 billion one-time charges, including about €772 million for NSN. Sales slumped 29 per cent from €10.4 billion a year ago to €7.35 billion, the lowest in almost seven years.

Nokia CEO Stephen Elop, more than a year after adopting Microsoft’s Windows Phone software over Nokia’s home-grown Symbian system, is struggling to halt slumping handset sales in emerging markets and sliding margins in smartphones.

Nokia also forecast that NSN’s performance would improve in the current quarter.

Nokia stock has lost about 20 per cent of its value in the past week alone after Nokia said April 11 that its main handset business lost money last quarter and will do so again in the current period.

Once dominant in the mobile-phone industry, Nokia’s market capitalisation has fallen by about €70 billion since Apple introduced the iPhone in 2007. In Q112, Nokia’s shipments slid 24 per cent to 83 million phones, the lowest level in almost six years.

Nokia sold approximately two million handsets from its new Lumia line running Windows Phone. Still, its low-end phones failed to cover the costs of its smartphone transition as rivals introduced cheaper touchscreen models in India and China, many based on Google’s Android software.

Colin Giles, a 20-year Nokia veteran who was appointed by Elop in February 2011 to lead Nokia’s sales organisation, will leave Nokia in June for personal reasons, Nokia said today. Giles ran the company’s China operations before becoming executive vice president of sales, and stepped in again last year to revamp the company’s China operations.