Nokia (NOK) Widens Q3 Loss on 56% Decline in Devices & Services Revs

Nokia Corp. ADS (NYSE: NOK) reported Q3 non-IFRS loss of €0.07 per share and reported loss of €0.26 per share. Last year's non-IFRS EPS was €0.03 while reported loss was €0.02 per share.

Group sales were €7.24 billion, from €8.98 billion the prior year.

Devices & Services sales fell 34 percent to €3.56 billion led by a 56 percent decline in Smart Device sales.

Mobile Volume was 82.3 million units, from 106.6 million last year. Smart Device volume fell 63 percent to 6.3 million units.

Nokia Siemens revs rose 3 percent to €3.50 billion.

Looking ahead, Nokia expects its non-IFRS Devices & Services operating margin in the fourth quarter 2012 to be approximately negative 6%, plus or minus four percentage points. This outlook is based on our expectations regarding a number of factors, including:

• competitive industry dynamics continuing to negatively affect the Smart Devices and Mobile Phones business units;
  
  
• the fourth quarter being a ramp up quarter for our new Lumia products, which are expected to start selling in select markets;
  
  
• consumer demand, particularly related to our current Lumia products;
  
  
• an expected increase in Devices & Services operating expenses as a result of new product launches, partially offset by expected cost reductions under our restructuring program; and
  
  
• the macroeconomic environment.

Nokia expects the fourth quarter 2012 to be a challenging quarter in Smart Devices, with a lower-than-normal benefit from seasonality in volumes, primarily due to product transitions and our ramp up plan for our new devices.

Nokia continues to target to reduce its Devices & Services non-IFRS operating expenses to an annualized run rate of approximately EUR 3.0 billion by the end of 2013.

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