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Nokia to post loss ahead of make-or-break launches
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  • Nokia to post loss ahead of make-or-break launches

Nokia to post loss ahead of make-or-break launches

Shunal Doke • October 18, 2012, 15:12:58 IST
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Nokia is expected to report another quarterly loss and dwindling cash reserves on Thursday, underscoring the importance of next month’s new smartphone launches…

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Nokia to post loss ahead of make-or-break launches

Nokia is expected to report another quarterly loss and dwindling cash reserves on Thursday, underscoring the importance of next month’s new smartphone launches as it battles to recoup ground lost to Apple and Samsung.

Once the world’s biggest mobile phone maker, Nokia has fallen behind rivals as its partnership with software giant Microsoft has yet to capture consumers’ imagination like Apple’s iPhones or Samsumg’s Galaxy models.

The Finnish group is now pinning its hopes on new, top-of-the-range Lumia 820 and 920 phones, which use Microsoft’s latest Windows 8 software and are due to hit stores in early November.

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Analysts say sales in the pre-holiday season may determine Nokia’s chances of long-term survival.

“Competition is fierce,” said Eric Beaudet at Natixis Securities. “The story really will be whether it can ramp up with the Windows 8 phones.”

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Analysts have written off the third quarter as a weak one for Nokia without new Lumia phones to compensate for a heavy drop in sales of older models.

They are forecasting an underlying loss - which strips out one-off items - of around 11 euro cents per share, according to the average forecast of 35 analysts. That would be the third straight quarter of underlying losses.

Desperate times…

Desperate times…

Many analysts said they would focus on how Chief Executive Stephen Elop plans to partner with network operators to make sure the newest Lumia phones can compete with Apple’s new iPhone 5 and Samsung’s Galaxy SIII.

Details on aggressive sales and marketing plans could persuade investors to give Nokia more time, analysts said.

RUNNING OUT OF CASH, AND PATIENCE

On the other hand, a big fall in its cash could signal Nokia is running out of time. Its cash position is forecast to fall to 3.4 billion euros at the end of the third quarter from 4.2 billion three months earlier.

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Nokia has been cutting spending and selling assets such as its Vertu luxury handset unit. It is also considering selling and leasing back its waterfront headquarters in Espoo, a short drive from Helsinki.

“We fear things are not going well,” Societe Generale analyst Andy Perkins said in a research note. “Certainly the news that Nokia is looking to sell and then lease back its headquarters causes us to suspect that cash is becoming more and more of an issue.”

Investors and analysts have said that if its cash position worsens and Lumia sales show little improvement over the coming months, the company may need to change its strategy - as well as its chief executive.

A few analysts recommend buying the shares, saying they look cheap at recent levels near 2.15 euros, with little premium over the value of assets such as intellectual property. The shares have fallen around 70 percent since the Microsoft tie-up in February 2011, hitting an 18-year low of 1.33 euros in July.

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But others say it is pointless to ponder valuations when a company, particularly in the fast-moving consumer technology industry, is losing market share.

Reuters

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Nokia smartphones Microsoft lumia 710 lumia 800 Windows Phone Nokia Oyj General Lumia 900 Nokia Lumia Lumia 820 Lumia 920 Windows Phone 8 Microsoft Windows Phone 8 microsoft corp Nokia Lumia series Lumia Series Nokia Loss Nokia Finances Nokia Profits
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Written by Shunal Doke
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Ever heard of one of those people who just never seem to shut up about something? Shunal is like the nerd equivalent of that guy. Believe us when we say that he can go on talking about games and smartphones for hours on end. We do manage to find some insight in his insane ramblings though, and through his moronic facade, he does seem to know more than he lets on. Sadly enough, it always ends up being about gaming with him. Or stupid, stupid puns. see more

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