Nokia warned that its first-quarter earnings would be weak, and the numbers are now in. Revenue declined 30% to €7.4 billion, or $9.7 billion USD last quarter, down from €10.4 billion, or $13.6 billion in the same quarter last year. The company posted a massive €1.3 billion loss, or $1.7 billion USD, which breaks down to a loss of €0.25 per share. Smartphone sales plummeted 52% to 1.7 billion units in the first quarter, and net device sales dropped 40% to 4.2 billion units. Read on for more.
“We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly,” Nokia CEO Stephen Elop said. “Over the last year we have made progress on our new strategy, but we have faced greater than expected competitive challenges. We have launched four Lumia devices ahead of schedule to encouraging awards and popular acclaim. The actual sales results have been mixed. We exceeded expectations in markets including the United States, but establishing momentum in certain markets including the UK has been more challenging.”
Nokia confirmed earlier this month that it sold 2 million Lumia Windows Phones in the first quarter, and it said on Wednesday that sales of its Lumia 900 smartphone at AT&T have been “encouraging” thus far. The Lumia 900 launched on April 8th, so sales are not reflected in Nokia’s first-quarter report.
The company confirmed in a separate statement that Colin Giles, executive vice president of sales, has resigned.
Sales of Research In Motion’s new BlackBerry 7 smartphones have slowed in recent weeks as competition from Apple’s iPhone 4S and Android phones heats up. In a note to investors on Friday, Canaccord Genuity analyst Mike Walkley noted that RIM’s new smartphones are not faring well ahead of the holidays. “Our recent checks indicate slowing sell-through trends for the new BlackBerry 7 smartphones the past couple weeks,” the analyst wrote. “Further, with the launch of the iPhone 4S, increasingly price competitive Android smartphones, improving Windows smartphones, and the launch of the Amazon Kindle Fire tablet, we anticipate increasing competition across all tiers of RIM’s products in C2012.” Read on for more.
Apple announced last month that it sold more than 4 million iPhone 4S units during the phone’s first weekend of availability. AT&T also noted that it activated more than 1 million iPhone 4S handsets in less than a week, and Sprint said the launch of its new iPhones resulted in its best-ever single day of sales. Now, more than a month after the handset’s launch, subscribers with all three major U.S. carriers still have a weeks-long wait before new orders will ship.
At the same time, sales of Android smartphones are hotter than ever. Google announced earlier this week that there are now more than 200 million active Android devices in the hands of consumers, and the company continues to activate an average of 550,000 Android devices each day. Android smartphones ranging from low-cost entry-level phones to high-end flagship phones continue to proliferate around the world, and Android is still growing rapidly.
BlackBerry 7 devices combine to comprise RIM’s biggest-ever launch as multiple handsets hit hundreds of carriers around the globe. With sales to end users already seen to be slowing and RIM’s first BBX smartphone possibly almost a year away, RIM could be in for a bumpy ride over the next few quarters.
Walkley dropped his price target on RIM stock to $21 from his earlier target of $28, maintaining a Hold rating. He also lowered his pro forma EPS estimate for fiscal 2012 from $4.72 to $4.27, and fiscal 2013 EPS estimates were dropped to $3.01 from $4.05.