Analysts predict continued substantial losses for Nokia in Q3
The Finnish mobile phone manufacturer Nokia’s serious problems have not eased off any in July-September, reckon analysts familiar with the company’s developments.
In a survey by the British news agency Reuters, which included 40 analysts, the median forecast for Nokia’s Q3 result excluding non-recurring items is EUR 264 million on the minus side.
The analysts also predict that the company’s net sales for Q3 will have shrunk to EUR 6.9 billion, which translates to a more than 20% decline year-on-year.
Nokia will either confirm or confound the experts when it announces its third quarter result on Thursday.
The company’s losses are said to stem from continued problems with sales of smartphones as well as low-end handsets.
Nokia has not succeeded in its attempt to break more widely into the lucrative smartphone market with its Windows Phone range.
Among low- and mid-priced handsets, what causes problems for the Finnish company are especially the Chinese manufacturers and their aggressive pricing tactics.
The analysts opine that the company’s mobile phone unit’s operating losses in Q3/2012 will be in the region of EUR 316 million.
To counterbalance this, the company’s telecommunications services arm Nokia Siemens Networks is predicted to come up with a positive result to the tune of EUR 44.5 million.
The location data services unit is also predicted to produce a more or less equally profitable result.
Apart from the falling handset sales, another cause for worry for Nokia is the company’s diminishing cash reserves.
According to Reuters, “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”.
Many market analysts feel that the crunch time for Nokia - whether the company can pull itself out of the current malaise - will depend greatly on new Windows 8 smartphones such as the Lumia 920.
These handsets will be presented to the public next month in readiness for the holiday season, when people get down to the serious business of shopping and buying gifts for Christmas.
An upturn in the company's fortunes is long overdue.
Previously in HS International Edition:
Investors remain unimpressed by new Nokia phone launch (6.9.2012)
Nokia considers selling its head office building (3.10.2012)
NEWS ANALYSIS: Nokia needs new time-out (7.9.2012)
Nokia eliminating up to 10,000 jobs in cost-cutting move (14.6.2012)
Uproar in Nokia over Lumia 920 video (10.9.2012)
NasdaqOMX Helsinki: Nokia