The pain continues for Nokia Corp. (NOK). Device sales are down across the board and profits have fallen off a cliff, well into the red. Indeed, Nokia is bleeding red all over its balance sheet for the quarter.
The Finnish company shipped 88.5 million devices during the quarter, shedding 20% in volume from the year-ago period and 18% from the previous quarter. Over the past year, smartphone sales have slipped 34% to 16.7 million devices and feature phones have dropped 16% to 71.8 million units. Device volume is down to 2006 levels.
It’s no wonder the Finnish company reported a loss of nearly $700 million. Revenue was down 7% from the year-ago period to $13.3 billion.
Nokia Siemens Networks is the company’s only division that is up, but it’s still running at a loss. Sales were up 20% from the year-ago period to $5.2 billion. And while the company still reported a loss of nearly $160 million on the joint venture, losses are moving in the right direction, incrementally inching their way to a break-even point at least.
Nokia’s worldwide market share has slipped from 34% a year ago to 25% following this latest quarter, according to IDC. The one-time leader in smartphone sales has fallen to the third position now behind Apple Inc. (AAPL) and Samsung.
“These disastrous results show how quickly bad a business can become for a company that does not understand the trends ahead of competitors or is too slow to react to those trends, in a such fast moving industry,” IDC analyst Francisco Jeronimo wrote.
Can Windows Phone 7 save this disaster?
Microsoft Corp.’s (MSFT) Windows Phone 7 platform will play an important role in Nokia’s future, but with Nokia’s business shrinking so dramatically in the meantime, it’s going to put more pressure on both companies to act quickly if things are expected to improve anytime soon.