According to Nokia Corporation’s Q1 2013 Interim Report, Nokia Group achieved underlying operating profitability for the third consecutive quarter, with a Q1 non-IFRS operating margin of 3.1%. Devices & Services achieved underlying profitability for the second consecutive quarter, with a Q1 non-IFRS operating margin of 0.1%. Devices & Services benefitted from a strong focus on cost as well as the reversal of approximately EUR 50 million of previously recognized inventory related allowances in Q1. Nokia Siemens Networks achieved underlying profitability for the fourth consecutive quarter, with a Q1 non-IFRS operating margin of 7.0%. Nokia Siemens Networks benefitted from strong gross margin performance in Q1. Nokia Group net sales in Q1 2013 were EUR 5.9 billion.
Nokia has posted a small loss in Q1 2013. The company lost €150 million (roughly $196 million) on €5.85 billion ($7.65 billion) in revenue over the quarter, but despite the losses, today’s financial results are definitely encouraging. As Nokia itself predicted, its Devices and Services division recorded a slight loss of €42 million ($55 million), and its HERE mapping division lost €97 million ($127 million), but those losses were offset by very positive results from Nokia Siemens Networks, which turned last year’s €1 billion ($1.31 billion) loss into a €3 million ($3.92 million) profit.
Devices & Services Q1 net sales decreased 25% quarter-on-quarter to EUR 2.9 billion. Lumia Q1 volumes increased 27% quarter-on-quarter to 5.6 million units, reflecting increasing momentum. Mobile Phones Q1 volumes decreased 30% quarter-on-quarter to 55.8 million units, reflecting competitive industry dynamics and an estimated higher than normal seasonal decline in the market addressable by Mobile Phones. Nokia Siemens Networks net sales decreased 30% quarter-on-quarter to EUR 2.8 billion, reflecting industry seasonality. Nokia Group net cash higher quarter-on-quarter. Nokia Group ends first quarter 2013 with a strong balance sheet and solid cash position. Gross cash was EUR 10.1 billion and net cash was EUR 4.5 billion. Nokia Group strengthened its net cash position by approximately EUR 120 million sequentially. Nokia Siemens Networks contributed approximately EUR 210 million to the Nokia Group net cash position.
Commenting on the results, Stephen Elop, Nokia CEO, said:
“At the highest level, we are pleased that Nokia Group achieved underlying operating profitability for the third quarter in a row. While operating in a highly competitive environment, Nokia is executing our strategy with urgency and managing our costs very well. We have areas where we are making progress, and areas where we are further increasing the focus. For example, people are responding positively to the Lumia portfolio, and our volumes are increasing quarter over quarter. Nokia Siemens Networks delivered another strong quarter and contributed to an overall improvement in Nokia Group’s cash position. On the other hand, our Mobile Phones business faces a difficult competitive environment, and we are taking tactical actions and bringing new innovation to market to address our challenges. All of these efforts are aimed at improving our financial performance and delivering more value to our shareholders.”
Download Nokia Corporation’s Q1 2013 Interim Report