Electronics Production | April 11, 2012

Nokia lowers Q1 Devices and Services outlook

Nokia has lowered its first quarter 2012 outlook for Devices and Services. The company said it plans to accelerate cost reductions in response.
Nokia announced today its Devices & Services operating margin in the first quarter 2012 was approximately negative 3 percent, compared to the previously expected range of "around break even, ranging either above or below by approximately 2 percentage points".

The company expects second quarter 2012 results to be similar to or lower than first quarter results.

In a statement the company blamed "competitive industry dynamics" for poor sales in the Mobile Phones and Smart Devices business units, particularly in India, the Middle East, Africa and China as well as gross margin declines.

"Our disappointing Devices & Services first quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our Devices & Services business continues to be in the midst of transition," said Stephen Elop, President and CEO of Nokia.

Nokia currently estimates that Devices & Services net sales in the first quarter 2012 were EUR 4.2 billion, comprised of Mobile Phones net sales of EUR 2.3 billion (71 million units), Smart Devices net sales of EUR 1.7 billion (12 million units), and Devices & Services Other net sales of EUR 0.2 billion.

Nokia said it will continue to increase focus on accelerating Lumia sales, as well as on lowering the company's cost structure, to respond to the disappointing figures.

"Nokia will accelerate planned cost reductions and will pursue additional significant structural actions if and when necessary," the company statement said.


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