Nokia posts loss but beats expectations

Finland's Nokia, struggling to hold its place as the world's top mobile phone maker, on Thursday posted a third quarter loss of 68 million euros ($94 million dollars), far smaller than analysts expected. The company saw its share price soar as high as 12 percent on the news before closing 5.5 percent higher on a Helsinki stock exchange down 1.2 percent. Analysts polled by the Dow Jones Newswires had expected the company to post a net loss of 321 million euros for the quarter. The company "is going the right way because the profitability was ... better than forecasted," Pohjola Bank analyst Hannu Rauhala told AFP. The result was a far cry from the company's net profit for the July-September period last year of 529 million euros but a large improvement over the second quarter net loss of 368 million euros. Nokia sales also beat expectations, at 8.98 billion euros for the quarter, compared to estimates for 8.64 billion euros, but far lower than the 10.27 billion euros chalked up in the third quarter of 2010. The mobile phone giant meanwhile saw overall handset sales plunge 25 percent year-on-year to 5.39 billion euros, while its smartphone sales, which is Nokia's weak point as it loses market share to competitors such as Apple, plummeted 39 percent to 2.21 billion euros. Chief executive Stephen Elop, who in February announced a radical restructuring and the phasing out of Symbian as Nokia's smartphone platform in favour of a partnership with Microsoft, said he was encouraged by the progress made in the third quarter. "We started to see signs of early improvement in many areas," he said in a statement. However, he acknowledged that the company "must continue to focus on consistent progress so that we can move Nokia through the transformation and deliver superior results to our shareholders." Although still the world's largest mobile phone maker, Nokia is operating in a rapidly changing landscape and has in the past couple of years seen RiM's Blackberry, Apple's iPhone and handsets running Google's Android platform take growing bites out of its market share. The former undisputed world leader recently announced it would no longer provide market share figures but for the second quarter analysts put its share at 23 percent, compared with a peak of 40 percent in the first half of 2008. Nokia is hoping to halt the slide avalanche with its first Windows-based phone, which Microsoft said Thursday should hit stores next week. Elop meanwhile only said the new phone would appear "in select countries later this quarter. "We then intend to systematically increase the number of countries and launch partners during the course of 2012," he added. Analysts stressed how important the success of the new Windows phone would be for Nokia. "One of the key points for Nokia's new strategy is the new Windows platform," Rauhala said. "That will be the first concrete evidence for what Nokia is really going to do and what kind of product Nokia will launch ... to compete with platforms used by Samsung, iPhone and all the other (smartphone) players," he added. IDC analyst Francisco Jeronimo agreed. "People want the new Windows phone. Symbian is a ghost operating system at the moment for Nokia," he told Dow Jones Newswires. "The success of its new Windows phone will be vital for the company. If it fails, the company will be in a very dangerous position," he said. Nokia, which at the end of 2010 employed around 60,000 people, has announced it will cut or outsource nearly 10,000 jobs as part of its dramatic restructuring.