Nokia 3Q results down

Nokia results for the third quarter were down 20% year on year, and 1% sequentially. Nokia made net sales of Euro 9.8 billion in the quarter.

Devices & Services net sales were Euro 6.9 billion, down 20% year on year and up 5% sequentially (down 20% and up 6% at constant currency), and non-IFRS operating margin of 11.4% (18.6% in Q3 2008 and 12.2% in Q2 2009). The Devices & Services gross margin was 30.9%, down from 34.0% in Q2 2009.

Services net sales were Euro 148 million (billings of EUR 172 million). Due to the divestment of the security appliance business in April 2009, services net sales are not directly comparable to prior periods.

Estimated industry mobile device volumes were 288 million units, down 7% year on year and up 7% sequentially. Nokia mobile device volumes were 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 Siemens Networks net sales were Euro 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).

The company announced an operating cash flow of Euro 720 million. Total cash and other liquid assets were Euro 7.4 billion at the end of Q3 2009.

Olli-Pekka Kallascuo, Nokia CEO, stated: “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.

“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.”

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

The business added that 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%.

Nokia and Nokia Siemens Networks also now expect that Nokia Siemens Networks market share will decline by more than previously expected in 2009, compared with 2008. This is an update to Nokia and Nokia Siemens Networks earlier expected moderate decline. Nokia and Nokia Siemens Networks continue to see strong performance in its Services business unit expected to be offset by declines in certain product businesses.

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