Nokia Corp said on Thursday that its third-quarter net loss widened to 969 million euros (US$1.27 billion) as revenue plunged 19 percent and sales of its flagship Windows phone fell below 3 million units. However, investors had been expecting an even bigger drop in sales and that sent shares in the company higher.
The struggling company said that net sales dropped to 7.2 billion euros and it gave a grim outlook for the rest of the year, saying the fourth quarter would be “challenging ... with a lower-than-normal benefit from seasonality in volumes.”
Last year, Nokia reported a third-quarter net loss of 68 million euros on revenues of 8.9 billion euros.
While the loss was deeper than analysts’ forecast for a 610 million euros shortfall, sales were better than expectations at 6.99 billion euros. Nokia’s share price surged more than 8 percent to 2.39 euros in early afternoon trading in Helsinki.
The company said its feature phones had shown strong sales and Nokia Siemens Networks — its joint venture with Germany’s Siemens AG — had seen 3 percent revenue growth in the period.
Smartphone revenue dropped more than 50 percent to 976 million euros, with sales of its first Windows phones falling to 2.9 million units from 4 million in the second quarter.
The Finnish company said it sold a total of 83 million devices in the quarter, down slightly from the previous quarter, but a plunge of 22 percent from a year earlier when it had sales of more than 106 million.
Nokia chief executive Stephen Elop conceded that Nokia was still suffering as it continues to shift its operating platform from Symbian and Meego to Microsoft’s Windows software.
“As we expected, the third quarter was a difficult quarter in our devices and services business. We continued to manage through a tough transitional quarter for our smart devices business as we shared the exciting innovation ahead with our new line of Lumia products,” Elop said. “While we continue to focus on transitioning Nokia, we are determined to carefully manage our financial resources [and] improve our competitiveness.”