Nokia Corp. (NYSE: NOK) this morning issued a preliminary look at first and second quarter earnings, and the view is not pretty. The company noted margin declines and poor sales in Africa, the Middle East, and Asia.
The company lowered the estimate for its first quarter adjusted operating margin from flat to a loss of -3%. The company also said that its second quarter margins would be “similar to or below” the revised first quarter estimate.
On the brighter side:
In the first quarter 2012, Nokia sold more than 2 million Lumia devices at an average selling price of approximately EUR 220 (reported within the Smart Devices business unit). Furthermore, Nokia has seen sequential growth in Lumia device activations every month since starting sales of Lumia devices in November 2011. Lumia has gained market share with both distribution partners and consumers.
The company is also increasing its spending on the Lumia smartphones in an effort expand its market for the flagship devices. The news is not so good for its non-smartphone products:
Nokia is taking tactical pricing actions in the near term and plans to bring new products to market in the second quarter 2012. Nokia will accelerate planned cost reductions and will pursue additional significant structural actions if and when necessary.
Shares are down about -17% at $4.20 in pre-market trading. That would establish a new low to the current 52-week range of $4.46-$9.42.
Paul Ausick
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