Nokia Posts £800m Loss For Q4 2011

Nokia has revealed its financial results for Q4 2011 as well as the full year results which shows that smartphone sales are still slipping and it has posted an operating loss of €954 million (£800m) for the last three months of 2011.

In Q4 2010, prior to the company announcing the partnership with Microsoft, Nokia posted an operating profit of €884m (£707m), highlighting the effect its transition to the new Windows Phone platform is having on the company’s bottom line.

Nokia sold 19.6m smartphones in the final quarter of 2011 which is down 31 per cent on the same period last year. Nokia also announced that it had sold “well over 1 million Lumia devices to date”, highlighting the on-going importance of Symbian devices to the company.

Nokia Q4 2011 results

The average selling price of the smartphones was also down from €154 to €140 year-on-year. In total in 2011 Nokia shipped 77.3m smartphones which was 25 per cent down on 2010 when the company sold 103.6m.

In terms of feature phones, the company is still selling these in huge numbers, shipping 93.9m in Q4 2011 down just one per cent year-on-year. However the average selling price has dropped from €42 to €32.

While the operating loss of €954m will make bleak reading for any Nokia shareholder, the mobile division actually made a profit of €208m – though this was 81 per cent down year-on-year. It was the Location & Commerce division which led to the overall loss, posting an operating loss for its section alone of €1.2 billion.

Nokia Q4 2011 results

Overall in 2011, Nokia posted an operating loss of €1.73bn compared to an operating profit of €2bn in 2010. One interesting note to take from the results, is that Microsoft paid Nokia $250m in a “platform support payment”, the first of many of such payments over the period of the arrangement between the two companies. Of course Nokia will also be paying Microsoft royalty fees.

With the launch of the Nokia Lumia 800 and 710 in November and the Nokia Lumia 900 in the US at CES earlier this month, it will be very interesting to see the first full quarter of Nokia WP7 handsets to get an accurate measure of how the new platform is working for both Microsoft and more importantly Nokia.

Source: Nokia (pdf)

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