The Finnish mobile phone maker also reported an unexpected fall in sales at its previously upbeat equipment venture, Nokia Siemens Networks.
Nokia, which has fallen behind Samsung and Apple in the smartphone race, said it sold 5.6 million units of Lumia handsets in the first quarter, up from 4.4 million in the previous quarter and in line with expectations.
But overall net sales fell 20 percent to 5.9 billion euros from a year earlier, while phone volumes tumbled 30 percent on the previous quarter.
It forecast margins in its devices and services business would be “approximately negative 2 percent” in the second quarter, down from a positive 0.1 percent in the first quarter.
“The shortfall is in the mobile phone side, where both volumes and average selling prices came lower than expected,” said Hakan Wranne, analyst at Swedbank. “That is, of course, a bit worrying, since that has been their bread and butter business in the devices and services unit. I think we will see the market’s profit estimates for 2014 come down.”
Nokia shares were down more than 9 percent in late morning trading, having been as low as €2.30, a far cry from their peak of €65 in 2000 and even the €4 to €5 euros many analysts see as the sum value of the company’s parts, which include its handset business, Navteq mapping unit and stake in Nokia Siemens Networks.
Investors have been growing impatient about seeing results from Stephen Elop, who was hired as chief executive in 2010 to lead a turnaround and made the decision to switch to the untried Windows software in early 2011.
Mr. Elop had said the transition would take about two years, a period that is now over, raising questions about how much longer he has to show that the company is on the right track.
“Basically, he has only the second quarter,” said Mikko Ervasti at Evli, a Finnish investment banking and wealth management group.
Nokia has been bleeding cash and was forced to cancel its dividend and sell and lease back its headquarters to fill its coffers, though its net cash position by the end of March had unexpectedly improved to €4.5 billion from €4.4 billion three months earlier.
The company’s first-quarter underlying loss, which excludes special items, decreased to 2 euro cents a share from 8 a year earlier. Markets had expected a loss of 4 euro cents, according to a Reuters poll.
While Nokia still sells more regular mobile phones than smartphones, its future depends on higher-margin smartphones as a growing number of global consumers want access to apps from their handsets.
The smartphone industry’s top two players show little sign of ceding market share. A Reuters survey showed that the market estimates Samsung shipped around 61.6 million smartphones in the first quarter, while Apple shipped 36.9 million iPhones.
Article source: http://www.nytimes.com/2013/04/19/technology/nokia-trims-its-loss-as-expected.html?partner=rss&emc=rss