HELSINKI (AP) - Nokia’s net loss nearly quadrupled in the second quarter on sagging sales of smartphones, a market in which the company is struggling to regain ground lost to rivals including Apple and Samsung. Shares jumped, however, as overall sales exceeded forecasts.
Nokia posted a net loss of (EURO)1.41 billion ($1.72 billion), compared with a loss of a (EURO)368 million in the same period last year.
Overall sales were down 19 percent to (EURO)7.54 billion, not as low as analysts’ forecast of (EURO)7.36 billion, according to financial data provider FactSet. Smartphone sales were weak, however, dropping 34 percent to (EURO)1.54 billion.
Nokia shares jumped 10 percent to (EURO)1.5 after the report. Analyst Mikko Ervasti at Evli Bank in Helsinki said Nokia performed better than expected in lower-end devices, shipping 84 million such units compared to market expectations of 80 million.
The Finnish company was the world’s leading mobile phone maker for more than a decade but was overtaken by Samsung in the first quarter according to research firm Gartner.
Facing stiff competition from Apple’s iPhone and devices running on Google’s Android software, Nokia tried to stem the decline in smartphones in part through a partnership with Microsoft announced last year, replacing Nokia’s existing Symbian operating platform with Microsoft’s Windows Phone software.
A drop in sales was expected during this transition period, and Nokia said that the decline of Symbian phones dragged down sales in all regions expect for North America, where the decline was “more than offset” by sales of Nokia’s Lumia devices, which run on the Windows software. Nokia said it sold 4 million Lumia devices worldwide in the quarter.
Questions arose about Lumia sales in the U.S. earlier this week when Nokia and AT&T halved the price of the flagship Lumia 900 to $50, just three months after its introduction. Nokia called the cut “a normal strategy that is put in place during the life cycle of most phones.”
Nokia’s global market share has steadily shrunk from the peak of 40 percent in 2008 to 29 percent in 2011 and is expected to dwindle further this year. Meanwhile, Nokia shares have fallen to their lowest level since the 1990’s, plunging below (EURO)2 in mid-June.
Please read our comment policy before commenting.