Wednesday, October 14, 2009

Nokia and NSN Report Improved Conditions in Q3 But Market Share Declines

Nokia reported net sales of EUR 9.8 billion for Q3 2009, down 20% year on year and down 1% sequentially (down 19% and flat at constant currency). Net sales of mobile devices & services came in at EUR 6.9 billion, down 20% year on year and up 5% sequentially (down 20% and up 6% at constant currency). The company's overall non-IFRS operating margin was 11.4% (18.6% in Q3 2008 and 12.2% in Q22009), while gross margin for devices and services was 30.9%, down from 34.0% in Q2 2009. Nokia's third quarter 2009 reported operating loss was EUR 426 million, compared with an operating profit of EUR 1.5 billion in the third quarter 2008.


"The demand for mobile devices improved in many markets during Q3. 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. I also want to highlight the good operating expense management that helped the segment deliver solid earnings," stated company CEO Olli-Pekka KALLASVUO.


Net sales for Nokia Siemens Networks were EUR 2.8 billion, down 21% year on year and down 14% sequentially (down 20% and down 14% at constant
currency), and non-IFRS operating margin of -1.9% (5.1% in Q3 2008). NSN's reported gross profit decreased 28% to EUR 778 million, compared with EUR 1.1 billion in the third quarter 2008, with a reported gross margin of 28.2% (30.8%).


Nokia and Nokia Siemens Networks now expect the mobile infrastructure and fixed infrastructure and related services market to decline approximately 5% in Euro terms in 2009, from 2008 levels. This is an update to Nokia and Nokia Siemens Networks earlier expected decline of approximately 10%. However, Nokia Siemens Networks expects its market share will decline by more than previously expected in 2009, compared with 2008. Strong performance in NSN's Services business unit is expected to be offset by declines in certain product businesses.


"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," said Kallasvuo.


Some highlights from the Nokia's quarterly financial report:


  • Estimated industry mobile device volumes of 288 million units, down 7% year on year and up 7% sequentially.


  • Nokia mobile device volumes of 108.5 million units, down 8% year on year and up 5% sequentially.


  • Nokia estimated mobile device market share of 38% in Q3 2009, at the same level as in Q3 2008 and in Q2 2009.


  • Nokia mobile device ASP of EUR 62, at the same level as in Q2 2009.


  • Nokia expects industry mobile device volumes in the fourth quarter 2009 to be up sequentially.


  • Nokia expects its mobile device market share in the fourth quarter 2009 to be approximately at the same level sequentially.


  • Nokia expects industry mobile device volumes to be approximately 1.12 billion units in 2009, down approximately 7% from approximately 1.21 billion units Nokia estimated for 2008. This is an update to Nokia's earlier estimate of industry mobile device volumes declining approximately 10% in 2009 from 2008 levels.
http://www.nokia.com
http://www.nsn.com

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