Nokia Q1 2013 results: 5.6m Lumias sold, 150m euro loss but good overall results

Nokia has just published its Q1 financial report for 2013 and the company has suffered a small, €150m loss, with overall income revenue of €5.85bn. Windows Phone sales are on the rise at 5.6 million units sold compared to last quarter's 4.4 million, which amounts to a 27% increase over last quarter.

Their Devices and Services division posted a small loss of about €42m but this was offset by good results from the Nokia Siemens Networks division.

On a more detailed note their Mobile Phones sales volume has decreased by almost 30% but that is mainly on the non-smartphone front because, as noted earlier, the Lumia line is at an all time high. Unfortunately for the company, it seems they are still having trouble penetrating the North American market with only 400,000 units being sold there.

Stephen Elop commented on the report saying: 

"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."

Overall it seems the company is doing better than these figures initially suggest. Nokia, at the end of this financial quarter has a €10.1bn gross reserve (€4.5bn net). The company's plan is undoubtedly to stay the course and bring exciting new devices to market in the hopes that they'll return to the black in the next quarter - but with the slow pace of growth, it remains to be seen if those hopes will be realised.

Source: Nokia

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Nokia doesn't have to do well in the USA to be successful. They have never been successful in the USA. When Nokia was selling over 100M phones every year, they weren't selling them in the USA. This is likely wahy MS chose them, because outside the USA; if they can make a nice phone with a bunch of services that Nokia users are use to having, MS can make a nice chunk of change outside the USA where iPhone has lower penetration and Android and Blackberry are the only real competition. And since Blackberry is now losing its appeal in these countries, Microsoft can try to move in and get as much of that as they can.

Looking at the linked PDF, the results don't look "overall good" to me. Phone shipments overall are down 31%, Smartphones down 32%.

The only thing that looks positive is that they've turned around Nokia-Siemens pretty well around a year, which is great news. But the figures on mobile sales look really grim . They do look to be haemorrhaging less in the mobile division though, so while they're making a loss, it's much less than it was.

Don't get me wrong, I really don't want to see a great manufacturer like Nokia go under, but these figures look far from good.

Sales being down on higher profit margin devices is acceptable, also keep in mind nokia is not the same company they were a year ago. They've slimmed down and tightened their belt and gotten hungrier in terms of R&D and marketing. They're making a lot of the right choices other companies in various industries have made in similar situations, and with the sales figgures they're showing, things look good.

Well net sales are down 20% and devices sold are down 31% year on year so I fail to see how in any way these are good overall results.

Maybe Lumias are doing better but overall these look like poor results.

Depicus said,
Well net sales are down 20% and devices sold are down 31% year on year so I fail to see how in any way these are good overall results.

Maybe Lumias are doing better but overall these look like poor results.

Those numbers are made up on the back of older and dying dumb phones, Lumia sales are on the rise and they have a way better profit margin tied to them compared to the Symbian dumb phone. In the past they'd have to sell, for example, 20 million dumb phones to make the same amount of money they can make from 10 million, or less, Lumia smartphones.

Thus unit sales take a hit as they transition from one to the other but margins grow and more money is made.

Wow, actual numbers. Who would of thought. Wonder what country/area has the highest level of users since I have yet to see someone with a Lumia.

techbeck said,
Wow, actual numbers. Who would of thought. Wonder what country/area has the highest level of users since I have yet to see someone with a Lumia.

And what country do you live in? Here in Aus I see numerous people on trains, buses etc with them!

ingramator said,

And what country do you live in? Here in Aus I see numerous people on trains, buses etc with them!

United States. Just could be the area I am in as well.

Ditto, US here as well. That 400,000 unit number is accurate as I've seen one or two Lumias in person at best. Nokia has their work cut out for them. People walk into a store and almost as a reflex just ask for an iPhone. Would be nice to get the Lumia that same recognition. Glad it's doing well in other countries though.

techbeck said,
Wow, actual numbers. Who would of thought. Wonder what country/area has the highest level of users since I have yet to see someone with a Lumia.

My guess is Italy.

techbeck said,
Wow, actual numbers. Who would of thought. Wonder what country/area has the highest level of users since I have yet to see someone with a Lumia.
Europe. Also Asia. My wife is from the Philippines and Nokia and Blackberry are the most sold devices due to their lower cost. But the Nokias I speak of are really old models. The Lumia I don't think is that big yet as it is a bot expensive, but the lower end Lumias are selling in lots of places now and they are being bought.

In Dubai where my wife's sister works, they too are buying Nokias and Blackberry's, as number one. Tho in both cases, iPhone is showing up as she bought 2, but only because she makes better money in Dubai.

Every Person that I have shown how my Surface and Lumia works together absolutely loves it, and many have turned in iPhones and iPads for them.

The problem I see is that they are not getting the message to the Teenagers..

MikadoWu said,
The problem I see is that they are not getting the message to the Teenagers..

Teens want iPhones. There is no changing that. My niece wants one and I asked her the other day and all she said was "its cool" and "everyone else I know has one". And that is a BS reason to buy something, IMO.

I work at a High School in Florida, most of our Teens want and Android for the same reason.

I have convinced my soccer players to look at and some got WP8. Still a work in progress though.

techbeck said,

Teens want iPhones. There is no changing that. My niece wants one and I asked her the other day and all she said was "its cool" and "everyone else I know has one". And that is a BS reason to buy something, IMO.

Yep, I have said the same thing. But it snot just the teens, its the tweens (preteens) and even many adults. They buy it or want it because its cool, matches their shoes or favorite purse or dress. Even here in Chicago when I visit places where college students or teens in high school hangout, they mostly all have iPhones. But it is so funny when I pull out my Note 2, they all be looking and pointing and saying that phone looks so cool and how pretty and bright my wallpaper is.

Wow. That was better than A LOT of "analysts" predicted, I think Nokia will be able to pull through this and maybe (one day) reclaim rule as a no 1 handset manufacturer, lets see what else they can bring to the table!

ingramator said,
Wow. That was better than A LOT of "analysts" predicted, I think Nokia will be able to pull through this and maybe (one day) reclaim rule as a no 1 handset manufacturer, lets see what else they can bring to the table!

As long as Lumia sales keep growing at a steady pace each quarter then it shouldn't take long really. If they can go higher in Q2, say 6-6.5million then that small loss could be a small profit.

Not sure about the US, doesn't seem so. But here people still see Nokia as a quality product.
People are surprised about my Phone, its sturdyness, smoothness everything.. Once i mention its a Nokia I often get the 'Oh yes ofcourse' reaction haha.People are impressed by the Lumia's but as soon as they know its Nokia, it's normal to expect the absolute best.

Nokia isnt going nowhere, Me and many others with me, will stick with Nokia's regardless of the OS their Lumia's run. Build quality > everything.

Neobond said,
And a lot of people (including "analysts") predicted a quick death for Nokia lol

As long as they keep on innovating and don't stagnate like they previously did with their dumb phones, they will not die.