Nokia Q2 report: more Lumias sold, less money made

Nokia announced the Q2 financial results and numbers are red all over. Net sales and operating profits are down for Nokia as a whole and its core, Devices & Services. Actually, the only division reporting a positive IFRS operating profit is Nokia Siemens Networks.

It's not all bad news - volumes of Lumia sales increased 32% quarter on quarter to 7.4 million units, up from 4 million for the same quarter last year. That's below analysts' expectations of 8.1 million, which has sent Nokia stock down almost 4% at the time of writing.

The Lumia 720 and Lumia 520 (the world's most popular Windows Phone handset) are two of the main drivers behind the growth. These are mid-range and entry level phones respectively, which lead to a decrease in average selling price by 4% to €151 (no Symbian sales counteracted that somewhat as Symbians were cheaper than Lumias).

Year on year the smartphone sales are down from 10.2 million units, but a large portion of that is Symbian sales which went from 6 million in Q2 2012 to close to zero in Q2 2013. Also, net sales for Smart devices are down 24% year on year.

Nokia's featurephone business still rakes in a good deal of money (more than Smart Devices), but net sales are down 39% year on year as volumes dropped 27%. Nokia shipped 53.7 million feature phones, with 4.3 million of them being Ashas. Nokias ordinary keypad phones that cost above €30 have declined. The whole feature phone segment is really feeling the heat of ever-cheaper low-end smartphones.

Regionally, things aren't great either – net sales declined by a quarter year on year in Nokia's strongest market, Europe, and a whopping 57% in China. Other regions are down as well, even Nokia's smallest market, North America.

Nokia's HERE maps also saw a decline in net sales year on year, even though external sales went up. Most of that is due to higher sales to vehicle customers (providing map data for cars' built-in navigation) and less due to sales of Nokia devices.

Nokia Siemens Networks posted a profit for the fifth quarter in a row. Small profit, but still it's the only division that did. NSN is a 50/50 joint venture between Nokia and Siemens, but Nokia has agreed to buy Siemens out for €1.7 billion (€1.2 billion in cash, €0.5 billion as a loan from Siemens to be paid in a year).

As for next quarter, Nokia expects Devices & Services to be in the red again, but with higher net sales due to more Lumia shipments.

You can get more details and numbers from the full report (PDF).

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