Nokia shares plummet after Q1 loss prediction

Struggling mobile giant Nokia has revised its forecast for the first quarter of 2012, predicting a 3 percent operating loss in its devices and services category despite previously expecting it to break even.

The news sent Nokia’s shares down 15 percent to €3.27 ($A4.15) at close of the Helsinki stock exchange yesterday.

Nokia estimates net sales for the devices and services category will come in at €4.2 billion ($A5.2 billion), down from €7.1 billion ($A9 billion) for the previous corresponding period.

The Finnish giant expects non-smartphone mobile phones to be its highest seller, with net sales at €2.3 billion ($A2.9 billion) and 71 million units shipped, while smartphone sales are expected to come in at €1.7 ($A2.1 billion) billion and 12 million units sold. 

Nokia’s net cash at the end of the first quarter is estimated to be €4.9 billion ($A6.2 billion). 

The company has struggled to claw back market share from Apple’s iOS and Google’s Android in recent years.

Late last year it debuted its flagship and highly-anticipated Lumia handsets running Microsoft’s Windows Phone 7, following the signing of a strategic alliance with the software giant which coincided with Nokia dumping its once-dominant Symbian operating system. 

Nokia sold over 2 million Lumia phones in Q1 for an average selling price of €220. Its full first quarter results will be reported on April 19. 

The company has blamed a competitive mobile industry for the revised outlook. 

"Our disappointing devices & services first quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our devices & services business continues to be in the midst of transition," said Stephen Elop, President and CEO of Nokia.

"Within our smart devices business unit, we have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success.”

Nokia is aiming to combat both financial and market share decline by expanding the Lumia’s reach worldwide. It also hinted at cost reductions and “significant structural actions” if necessary. 

More bad news for Q2

Nokia predicted similar results for the second quarter of 2012, thanks again to a competitive industry and “consumer demand related to new products”.

Market leaders Apple and Samsung are both expected to release new versions of their flagship handsets within the next few months.