Nokia took major hits in its third quarter from a slump in handset shipments, lower device prices and a substantial one-time charge on the falling value of its network assets.
The Finland-based handset giant posted an $832 million loss after sales of its devices, Navteq division services and Nokia Siemens Networks joint venture fell a collective 20 percent compared to last year, to $14.6 billion.
In addition, Nokia took a $1.35 billion charge on its investment in Nokia Siemens Networks, a joint venture it formed with Siemens AG in 2007.
Nokia CEO Olli-Pekka Kallasvuo said that handset shipments and net sales in its Devices and Service business were “somewhat constrained by component shortages we encountered across the portfolio.”
Though handset shipments rose 5 percent sequentially, Nokia’s shipment of 108.5 million units put it 8 percent lower than last year. Also, the average selling price of a Nokia handset fell significantly from last year, to $92.40 from $107.30 during the same period in 2008.
Despite the gloomy results, Nokia rasied its previous forecast for handset volumes in 2009. The OEM now expects industry-wide device volumes to hit 1.12 billion units in 2009, a 7 percent decline over last year’s estimated 1.21 billion handset shipments. Nokia previously forecast a 10 percent decline from last year’s levels.
Nokia managed to hold on to its No. 1 spot for worldwide handset sales with a steady 38 percent market share. The company expects that figure to remain unchanged going into the next quarter.