Nokia posts huge loss in Q1

Nokia has posted a €1.6 billion ($A2bn) net loss for the last quarter, with its overall Q1 2012 sales results in line with earlier negative predictions.

Net sales were down from €10.4bn ($A13.2bn) in the previous corresponding quarter to €7.4bn ($A9.4bn). Fourth quarter 2011 net sales were posted at €10bn ($A12.7bn).

The phone maker suffered a €2.8bn ($A3.6bn) drop in devices and services sales in Q1, with its smart devices category the hardest hit.

Smart devices sales were down almost €2bn ($A2.5bn) from the previous quarter despite the launch of Nokia’s highly-anticipated Lumia range.

Nokia sold over 2 million Lumia phones in Q1 for an average selling price of €220 ($A280).

CEO Stephen Elop said while the range had been launched to “awards and popular acclaim”, the actual sales results had been mixed.

He said it had seen success in the US but other markets were proving difficult.

Elop again cited “competitive challenges” as one of Nokia’s main obstacles.

“We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly,” he said in a statement.

“Over the last year we have made progress on our new strategy, but we have faced greater than expected competitive challenges.

"We have a clear sense of urgency to move our strategy forward even faster.”

Nokia's share price dropped over three percent to €2.92 ($A3.70) per share on the Helsinki Stock Exchange following the announcement. 

The results were in line with an earlier forecast predicting an operating loss of three percent for the services and devices category. Nokia has predicted similar results for the division in Q2.