Nokia writes off €220m as losses deepen

NOKIA reported losses of €826m (£646.7m) for the three months to July yesterday and warned of more dismal figures in the current quarter, but shares in the troubled company jumped with results not as bad as feared.

The Finnish mobile phone manufacturer sold just 10.2m devices over the period, compared with 16.7m for the same stretch last year, and wrote off €220m worth of phones, although sales of its flagship Lumia models were double the previous quarter’s.

It now controls just 10 per cent of the smartphone market, down from 40 per cent three years ago, due to the popularity of offerings from rivals Apple and Samsung.

Nokia’s operating margin dropped to -11.8 per cent, from -5.2 per cent in the previous quarter and -4 per cent in last year’s comparative period. Sales also dropped 26 per cent since last year, to €4.02bn.

Chief executive Stephen Elop said the firm was going through a “transition period” as Nokia adopts the Windows Phone operating system on its devices.

Despite the firm’s losses, shares rose by 10 per cent yesterday as analysts said the results were ahead of expectations, and that sales of low-end feature phones had remained stable.

Tech analyst Janardon Menon at Liberum Capital said “all depends on Windows Phone 8”, the next iteration of Microsoft’s software.

Carphone Warehouse’s chief commercial officer Graham Stapleton said: “There are still many reasons to be optimistic about Nokia. Their turnaround won’t happen overnight but I’m confident they will succeed.”