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Nokia Q3 Results: beats estimates

| October 20, 2011 | 55 Replies
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Nokia Q3 results were published today. You can check out the pfd report below:

http://www.nokia.com/results/Nokia_results2011Q3e.pdf

Before the Q2 and Q3 results were ever available, it was thought that things would only get worse from Q3 with turn around beginning again in Q4. Last week however, some sources indicated possible stronger outlook for Nokia than expected, beating estimates. As you can see from the Q3 results and from the various headlines today, such as Reuters, noting the surprise return to profit.

Q3 spans July, August, September. The portfolio did not change during this time. There were announcements of new phones, but barely any were sold on time to have an effect. The new Belle devices though will most likely make a mark for Q4, as would contributions by N9 and WP7.5 from Nokia.

The boost is reflected by profit coming from mobile phones, with decline in smartphones. This quarter Nokia sold 106.6 Million mobile phones, up 20% from last quarter. though down 3% from last year (88.5M Q2 2011, 110.4 Q3 2010). In smartphones, Nokia actually sold more than last quarter, 16.8M vs 16.7M in Q2 2011, though down 38% from last year (27.1M Q3 2011). That’s still pretty amazing if you consider what Nokia’s offering in comparison to their competitors. Imagine now what Q4 2011 will look like with new smartphones contributing to the mix? (And not just new, actual decent ones, Belle, MeeGo and even WP).

 

Reported and Non-IFRS third quarter 2011 results1,2
EUR million Q3/2011 Q3/2010 YoY Change Q2/2011 QoQ Change
Nokia
 Net sales 8 980 10 270 -13% 9 275 -3%
 Operating profit -71 403 -487
 Operating profit (non-IFRS) 252 634 -60% 391 -36%
 EPS, EUR diluted -0.02 0.14 -0.10
 EPS, EUR diluted (non-IFRS)3 0.03 0.14 -79% 0.06 -50%
 Net cash from operating activities 852 439 94% -176
 Net cash and other liquid assets4 5 067 4 375 16% 3 891 30%
Devices & Services5
 Net sales 5 392 7 173 -25% 5 467 -1%
 Smart Devices net sales 2 206 3 612 -39% 2 368 -7%
 Mobile Phones net sales 2 903 3 364 -14% 2 551 14%
 Mobile device volume (million units) 106.6 110.4 -3% 88.5 20%
 Smart Devices volume (million units) 16.8 27.1 -38% 16.7 1%
 Mobile Phones volume (million units) 89.8 83.3 8% 71.8 25%
 Mobile device ASP6 51 65 -22% 62 -18%
 Smart Devices ASP6 131 133 -2% 142 -8%
 Mobile Phones ASP6 32 40 -20% 36 -11%
 Operating profit 132 807 -84% -247
 Operating profit (non-IFRS) 222 750 -70% 369 -40%
 Operating margin % 2.4% 11.3% -4.5%
 Operating margin % (non-IFRS) 4.1% 10.5% 6.7%
NAVTEQ
 Net sales 241 252 -4% 245 -2%
 Operating profit -45 -48 -58
 Operating profit (non-IFRS) 68 74 -8% 53 28%
 Operating margin % -18.7% -19.0% -23.7%
 Operating margin % (non-IFRS) 28.2% 29.4% 21.5%
Nokia Siemens Networks7
 Net sales 3 413 2 943 16% 3 642 -6%
 Operating profit -114 -282 -111
 Operating profit (non-IFRS) 6 -116 40 -85%
 Operating margin % -3.3% -9.6% -3.0%
 Operating margin % (non-IFRS) 0.2% -3.9% 1.1%

STEPHEN ELOP, NOKIA CEO:
I am encouraged by the progress we made during Q3, while noting that there are still many important steps ahead in our journey of transformation. With each step, you will see us methodically implement our strategy, pursuing steady improvement through a period that has known transition risks, while also dealing with the various unexpected ups and downs that typify the dynamic nature of our industry. During the third quarter, we continued to take the action necessary to drive the structural changes required for Nokia’s long-term success.
Our results in Q3 indicate that our sales execution and channel inventory situation have improved. From a product standpoint, our overall Mobile Phones portfolio performed well. We shipped approximately 18 million dual SIM devices in Q3, and in markets such as India where dual SIM is pervasive, we gained market share. We also strengthened our Smart Devices line up in Q3, with the launch of our first smartphones running Symbian Belle, which improves the user experience and strengthens the competitiveness of our product portfolio.
Additionally, I am encouraged by our progress around the first Nokia experience with Windows Phone, and we look forward to bringing the experience to consumers in select countries later this quarter. We then intend to systematically increase the number of countries and launch partners during the course of 2012.
To position Nokia for the future, we are driving fundamental changes in how we operate. In addition to the changes announced in April, in Q3 we announced plans for structural changes in manufacturing, Location & Commerce and supporting functions. The planned changes we have initiated are difficult but necessary in order to align the company to our strategy.
In summary, in Q3 we started to see signs of early improvement in many areas, but we must continue to focus on consistent progress so that we can move Nokia through the transformation and deliver superior results to our shareholders.

NSN and Navteq….don’t know what to say about that. But didn’t Nokia have to dole out 500M with Siemens to keep it going?

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