Nokia swings to $1.36b loss on NSN write-down

Dylan Bushell-Embling
16 Oct 2009
00:00
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Daily News

Nokia swung to a 913 million ($1.36 billion) net loss due to escalating losses from its Nokia Siemens Networks joint venture.

Nokia also attributed the result - its first quarterly net loss in over a decade - to an industry-wide decline in handset sales.

The surprise announcement caused Nokia's stock on the NYSE to decline more than 11% to $13.68 during yesterday's trading.

NSN's operating loss widened to €1.11 billion during the quarter, compared to a loss of €1 million the year before. Its revenue declined 21.2% to €2.67 billion.

“The challenging competitive factors and market conditions in the infrastructure and related services business necessitated non-cash impairment charges at Nokia Siemens Networks,” Nokia CEO Olli-Pekka Kallasvuo said.

But he said the company would continue to support NSN's actions to improve its performance.

Nokia's revenue declined 19.8% year on year to €9.81 billion as handset sales shrunk. The company said it sold 108.5 million units, down 8% year on year.

This decline was roughly in line with the performance of the entire handset industry, Nokia added, and its market share remained unchanged at 38%.

In one bright spot for NSN, the struggling unit said it now expects the telecom infrastructure market to decline by just 5% in 2009, compared to its earlier prediction of 10%.

Nokia meanwhile expects to have shipped 1.2 billion devices by the end of the year - a 7% decline from 2008.

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