Manufacturer’s device business makes a profit for the second consecutive quarter as Lumia sales hit 5.6 million units
Nokia’s mobile device sales fell sharply in the first quarter of this year, but it saw a surge in Lumia smartphone volumes.
Sales for Q1 were €2.9 billion, down 25 per cent from Q4 2012 and 32 per cent year-on-year. Smartphone sales fell five per cent sequentially and 32 per cent from a year ago to to €1.2 billion, while feature phone sales were €1.6 billion, representing a 36 per cant fall year-on-year and 31 per cent drop from the previous quarter.
European sales continued to make up a large majority of Nokia’s device business. This was €895 million in the quarter, down 26 per cent and 34 per cent sequentially and year-on-year respectively.
Total smartphone volumes amounted to 11.1 million units, more than half of which comprised of Lumia devices. Nokia sold 5.6 million units in the range, up from 4.4 million in the previous quarter.
The devices business made an underlying profit for the second consecutive quarter with €4 million, which was down from the €39 million made in the previous quarter and €126 million loss made in the same period a year ago. Operating profit was just positive at 0.1 per cent, down from one per cent in Q4 2012 and negative three per cent from a year ago.
The manufacturer’s overall average selling price (ASP) rose four per cent sequentially to €47 but was down from €51 from Q4 2012. Smartphone ASP rose three per cent from the pervious quarter to 34 per cent yearly to €191.
Overall, Nokia Group’s sales were down 27 per cent sequentially and by a fifth year-on-year to €5.9 billion. It made a loss of €257 million, down from the €1,47 billion loss from a year ago.
Nokia said that due to the wider availability of recently announced Lumia products, it expects sequential growth of the units from the range in Q2 to be higher than the 27 per cent figure posted for Q1.
It is expecting its operating margin to be around negative two per cent, plus or minus four percentage points.
It has based this forecast on a number of factors, including competitive industry trends continuing to affect its devices business, consumer demand for products, particularly its feature phones, continued ramp up of Lumia smartphones, expected increase in operating expenses and the economic environment.
Nokia CEO Stephen Elop (pictured) said: “At the highest level, we are pleased that Nokia Group achieved underlying operating profitability for the third quarter in a row. While operating in a highly competitive environment, Nokia is executing our strategy with urgency and managing our costs very well.
“We have areas where we are making progress, and areas where we are further increasing the focus. For example, people are responding positively to the Lumia portfolio, and our volumes are increasing quarter over quarter.
“On the other hand, our Mobile Phones business faces a difficult competitive environment, and we are taking tactical actions and bringing new innovation to market to address our challenges.”