Nokia reported that its loss had more than tripled in the second quarter. In the three months through June, the loss was €1.4 billion, or $1.7 billion. The company also made a €742 million dividend payment during the quarter. Since announcing its Microsoft alliance in February 2011, Nokia has amassed €3.5 billion in combined losses. Nokia is based in Espoo, Finland.
Sales rebounded in the U.S. market and the company posted the first tangible gains in its transition to a Windows-based smartphone business. Revenue from the sales of cellphones and services rose 45%in North America, to €128 million. This was the first such increase reported by the company in at least a decade.
The company sold four million new Windows-based Lumia smartphones in the second quarter. This was double their sales in the first quarter and more than analysts had expected. The Nokia chief executive, Stephen Elop, said, “I think this shows that as consumers get a Lumia in their hands, they are very happy with what they have.”
The upcoming release of Windows Phone 8 software is predicted to further increase sales of Lumia devices. Windows Phone 8 software promises more features and better coordination for computers and smartphones running Microsoft software. Francisco Jeronimo, an analyst with International Data Corp. in London, said, “Nokia’s quarterly loss was less than expected, and the volumes of its basic feature phones are increasing, which is a good sign. The results on Lumia show that the company’s turnaround strategy, which is a long-term project, could succeed.”
To provide savings to weather the transition to a Windows-centric business, the company has disclosed plans to reduce Nokia’s work force by a third, or nearly 21,000 jobs. Nokia’s net cash rose 8% to €4.2 billion, reflecting the benefits from its cost savings initiative.
Nokia Siemens Networks, its unprofitable network equipment venture, generated an operating profit in the quarter. Nokia’s non-smartphone business, responsible for 60% of sales, also performed strongly in the quarter. 73.5 million such phones were sold by Nokia, an increase of 2% from a year earlier.