Nokia Shows Progress, Beating Expectations Ahead of Windows Phone Launch

"I am encouraged by the progress we made during Q3, while noting that there are still many important steps ahead in our journey of transformation. With each step, you will see us methodically implement our strategy, pursuing steady improvement through a period that has known transition risks, while also dealing with the various unexpected ups and downs that typify the dynamic nature of our industry. During the third quarter, we continued to take the action necessary to drive the structural changes required for Nokia's long-term success. Our results in Q3 indicate that our sales execution and channel inventory situation have improved," stated Stephen Elop, Nokia's CEO.


Some highlights:


Net sales were EUR 8.980 billion, down 13% from EUR 10.270 a year earlier.


Device sales came in at EUR 5.392, down 25% from EUR 7.173 a year earlier.


Nokia shipped a total of 106.6 million mobile devices in Q3, down 3% from a year earlier.


Nokia shipped approximately 18 million dual SIM devices in Q3


Windows Phone launch will occur next week.

Nokia expects its non-IFRS Devices & Services operating margin in the fourth quarter 2011 to be between 1% and 5%.


Average selling price continued to decline in Q3 as more low-end phones were shipped.


The decline in Smart Devices net sales in the third quarter 2011 was primarily due to significantly lower volumes because of stronger smartphone competitors.


NAVTEQ reported Q3 net sales of EUR 241 million, down from EUR 252 million, because of lower sales of map licenses to mobile device customers, partially offset by higher sales of map licenses to vehicle customers due to higher consumer uptake of vehicle navigation systems.


Nokia Siemens Networks reported Q3 net sales of EUR 3.413 billion, up 16% YoY from EUR 2.943 billion a year earlier.


The year-on-year increase in Nokia Siemens Networks' net sales in the third quarter 2011 was driven primarily by growth from the acquired Motorola Solutions networks assets. Excluding the acquired Motorola Solutions networks assets, net sales would have increased 3% year-on-year, primarily driven by growth in the Global Services business unit, which represented approximately 50% of Nokia Siemens Networks' net sales in the third quarter 2011.
The sequential decline in Nokia Siemens Networks' net sales in the third quarter 2011 was driven primarily by typical industry seasonality as well as some impact from the current macroeconomic uncertainty, offset to a certain degree by the contribution from the acquired Motorola Solutions networks assets. Excluding the acquired Motorola Solutions networks assets, Nokia Siemens Networks' net sales would have decreased 12% sequentially.
At constant currency, Nokia Siemens Networks' net sales would have increased 18% year-on-year and decreased 7% sequentially.


NSN's research and development expenses increased 18% year-on-year and 4% sequentially, primarily due to the addition of R&D operations relating to the acquired Motorola Solutions networks assets as well as investments in strategic initiatives.


Nokia and Nokia Siemens Networks expect Nokia Siemens Networks' net sales to be between EUR 3.7 billion and EUR 4.0 billion in the fourth quarter 2011.
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