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Nokia Q2 2010 net sales EUR 10.0 billion, non-IFRS EPS EUR 0.11 (reported EPS EUR 0.06)

Friday, 23 July 2010 02:54 Micky

Yesterday Nokia released their Q2 Highlights which can be seen detailed below, as well as a note from Nokia's CEO, OPK on his forecast for both Nokia mobile phone, and Smartphone market, mentioning that the N8 will be like no other Nokia device.

OPK's statement can be found after the break, along with more details on devices, and services.

SECOND QUARTER 2010 HIGHLIGHTS

- Nokia net sales of EUR 10.0 billion, up 1% year-on-year and 5% sequentially (down 4% and up 2% at constant currency).

- Devices & Services net sales of EUR 6.8 billion, up 3% year-on-year and 2% sequentially (down 2% and 1% at constant currency).

- Services net sales of EUR 158 million, up 7% sequentially; billings of EUR 295 million, up 29% sequentially.

- Nokia total mobile device volumes of 111.1 million units, up 8% year-on-year and 3% sequentially.

- Nokia converged mobile device (smartphone and mobile computer) volumes of 24.0 million units, up 42% year-on-year and 12% sequentially.

- Nokia mobile device ASP (including services revenue) of EUR 61, down from EUR 62 in Q1 2010.

- Devices & Services gross margin of 30.2%, down from 34.0% in Q2 2009 and 32.4% in Q1 2010.

- Devices & Services non-IFRS operating margin of 9.5%, down from 12.2% in Q2 2009 and 12.1% in Q1 2010.

- NAVTEQ non-IFRS net sales of EUR 253 million, up 71% year-on-year and 34% sequentially (up 69% and 30% at constant currency).

- Nokia Siemens Networks net sales of EUR 3.0 billion, down 5% year-on-year and up 12% sequentially (down 11% and up 10% at constant currency).

- Nokia Siemens Networks non-IFRS operating margin of 1.7%, up from 0.1% in Q2 2009 and 0.6% in Q1 2010.

- Nokia operating cash flow of EUR 944 million.

- Total cash and other liquid assets of EUR 9.5 billion at the end of Q2 2010.

- Nokia taxes were unfavorably impacted by Nokia Siemens Networks taxes as no tax benefits are recognized for certain Nokia Siemens Networks deferred tax items. If Nokia's estimated long-term tax rate of 26% had been applied, non-IFRS Nokia EPS would have been approximately half a Euro cent higher.

OLLI-PEKKA KALLASVUO, NOKIA CEO:

"Despite facing continuing competitive challenges, we ended the second quarter with several reasons to be optimistic about our future. For one, the global handset market has continued to grow at a healthy pace, led by some of the less mature markets where Nokia is strong. We are also encouraged by the solid second quarter performance of our Mobile Phones business, helped by an improving line-up of affordable models.

In smartphones, we continue to renew our portfolio. We believe that the Nokia N8, the first of our Symbian^3 devices, will have a user experience superior to that of any smartphone Nokia has created. The Nokia N8 will be followed soon thereafter by further Symbian^3 smartphones that we are confident will give the platform broader appeal and reach, and kick-start Nokia's fightback at the higher end of the market."

INDUSTRY AND NOKIA OUTLOOK

- Nokia expects Devices & Services net sales to be between EUR 6.7 billion and EUR 7.2 billion in the third quarter 2010.

- Nokia expects its non-IFRS operating margin in Devices & Services to be between 7% to 10% in the third quarter 2010.

- Nokia and Nokia Siemens Networks expect Nokia Siemens Networks' net sales to be between EUR 2.7 billion and EUR 3.1 billion in the third quarter 2010.

- Nokia and Nokia Siemens Networks expect the non-IFRS operating margin in Nokia Siemens Networks to be between -2% and 2% in the third quarter 2010.

- Nokia continues to expect industry mobile device volumes to be up approximately 10% in 2010, compared to 2009 (based on its revised definition of the industry mobile device market applicable beginning in 2010).

- Nokia continues to target its mobile device volume market share to be flat in 2010, compared to 2009.

- Nokia continues to expect its mobile device value market share to be slightly lower in 2010, compared to 2009.

- Nokia continues to target non-IFRS operating expenses in Devices & Services of approximately EUR 5.7 billion in 2010.

- Nokia targets Devices & Services non-IFRS operating margin of 10% to 11% in 2010. This provides quantification in line with the June 16, 2010, revised target for Devices & Services non-IFRS operating margin for 2010 to be at the lower end of, or below, the previous target of 11% to 13%. Nokia continues to expect Devices & Services non-IFRS operating margin during the fourth quarter 2010 to be higher than the currently targeted full year Devices & Services non-IFRS operating margin.

- Nokia and Nokia Siemens Networks continue to expect a flat market in Euro terms for the mobile and fixed infrastructure and related services market in 2010, compared to 2009.

- Nokia and Nokia Siemens Networks now target Nokia Siemens Networks to maintain its market share in 2010. This is an update to Nokia and Nokia Siemens Networks earlier target for Nokia Siemens Networks to grow faster than the market in 2010.

- Nokia and Nokia Siemens Networks continue to target Nokia Siemens Networks to reduce its non-IFRS annualized operating expenses and production overheads by EUR 500 million by the end of 2011, compared to the end of 2009.

- Nokia and Nokia Siemens Networks continue to target Nokia Siemens Networks non-IFRS operating margin of breakeven to 2% in 2010.

SECOND QUARTER 2010 FINANCIAL HIGHLIGHTS

(Comparisons are given to the second quarter 2009 results, unless otherwise indicated.)

The non-IFRS results exclusions

Q2 2010 - EUR 365 million consisting of:

- EUR 114 million restructuring charge and other associated items in Nokia Siemens Networks

- EUR 116 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks

- EUR 131 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ

- EUR 4 million of intangible assets amortization and other purchase price related items arising from the acquisition of OZ Communications, Novarra and MetaCarta in Devices & Services

Q1 2010 - EUR 332 million (net) consisting of:

- EUR 125 million restructuring charge and other associated items in Nokia Siemens Networks.

- EUR 29 million gain on sale of assets and a business in Devices & Services.

- EUR 116 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks.

- EUR 118 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ.

- EUR 2 million of intangible assets amortization and other purchase price related items arising from the acquisition of OZ Communications in Devices & Services.

Q2 2009 - EUR 348 million (net) consisting of:

- EUR 22 million of impairment of intangible assets in Devices & Services

- EUR 83 million restructuring charge in Devices & Services

- EUR 68 million gain on sale of security appliance business in Devices & Services

- EUR 69 million restructuring charge and other associated items in Nokia Siemens Networks

- EUR 121 million of intangible assets amortization and other purchase price related items arising from the formation of Nokia Siemens Networks

- EUR 119 million of intangible assets amortization and other purchase price related items arising from the acquisition of NAVTEQ

- EUR 2 million of intangible assets amortization and other purchase price related items arising from the acquisition of OZ Communications in Devices & Services.

Non-IFRS results exclude special items for all periods. In addition, non-IFRS results exclude intangible asset amortization, other purchase price accounting related items and inventory value adjustments arising from i) the formation of Nokia Siemens Networks and ii) all business acquisitions completed after June 30, 2008.

Nokia Group

Nokia's second quarter 2010 net sales increased 1% to EUR 10.0 billion, compared with EUR 9.9 billion in the second quarter 2009. At constant currency, group net sales would have decreased 4% year-on-year.

The following chart sets out the year-on-year and sequential growth rates in our net sales on a reported basis and at constant currency for the periods indicated.

SECOND QUARTER 2010 HIGHLIGHTS - Nokia net sales of EUR 10.0 billion, up 1% year-on-year and 5% sequentially (down 4% and up 2% at constant currency).- Devices & Services net sales of EUR 6.8 billion, up 3% year-on-year and 2% sequentially (down 2% and 1% at constant currency).

- Services net sales of EUR 158 million, up 7% sequentially; billings of EUR 295 million, up 29% sequentially.- Nokia total mobile device volumes of 111.1 million units, up 8% year-on-year and 3% sequentially.

- Nokia converged mobile device (smartphone and mobile computer) volumes of 24.0 million units, up 42% year-on-year and 12% sequentially.

- Nokia mobile device ASP (including services revenue) of EUR 61, down from EUR 62 in Q1 2010.- Devices & Services gross margin of 30.2%, down from 34.0% in Q2 2009 and 32.4% in Q1 2010.

- Devices & Services non-IFRS operating margin of 9.5%, down from 12.2% in Q2 2009 and 12.1% in Q1 2010.- NAVTEQ non-IFRS net sales of EUR 253 million, up 71% year-on-year and 34% sequentially (up 69% and 30% at constant currency).

- Nokia Siemens Networks net sales of EUR 3.0 billion, down 5% year-on-year and up 12% sequentially (down 11% and up 10% at constant currency).

- Nokia Siemens Networks non-IFRS operating margin of 1.7%, up from 0.1% in Q2 2009 and 0.6% in Q1 2010.- Nokia operating cash flow of EUR 944 million.

- Total cash and other liquid assets of EUR 9.5 billion at the end of Q2 2010.

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Poll - What is your Favorite Ovi Store Game?

Wednesday, 21 July 2010 14:11 Micky

ovi apps Rhiain from Nokia Conversations, Nokia's Official Blog has posted up a Poll asking their readers, which is their favorite Ovi Store Game they have downloaded for their Nokia device.

Do you spend hours scoring digital goals? Waste weekends attempting to control a cartoon character? Nokia Conversations want to know. In a previous Poll, readers have already placed Ovi Maps at the top of the productivity apps tree, but what games will get your vote in this new Poll?

Rhiain has compiled a list of the top ten games selling like hotcakes over on Ovi Store, is your favourite included? If not, add it in! Cast your vote now, and let them know your top three favourite games. Click on the poll image below to head across directly to the Poll.

Harbinger-Skyterra $7 billion deal with Nokia gives AT&T Competition with LIGHTSQUARED

Tuesday, 20 July 2010 11:09 Micky

Barbinger Capital, a New York investment firm with extensive telecommunications holdings, plans to announce Tuesday a eight-year, $7 billion deal with Nokia Siemens Networks to build and operate a satellite and mobile broadband network for wireless providers and other businesses.

The new venture will feature the mobile high-speed Internet service developed by Nokia Siemens and rely on satellites and terrestrial spectrum that Harbinger acquired through its purchase of Reston-based SkyTerra earlier this year, according to an announcement scheduled for Tuesday morning. The partners plan to name the venture LightSquared and have selected Sanjiv Ahuja, a former chief executive of France Telecom’s Orange subsidiary, to run it.

With the deal, Harbinger hopes to meet important financing and coverage requirements set by the Federal Communications Commission as contigencies of the firm’s purchase of SkyTerra. Satisfying those requirements would allow Harbinger to join the race to provide broadband service to the growing horde of wireless customers who are hungry for faster and more powerful devices.

“With a strong management team and a world-class partner to build and manage the network, the business is well positioned to capitalize on key trends; demand for wireless broadband is growing at a rapid pace and there is an increasing need for additional network capacity and reach," said Philip Falcone, chief executive of Harbinger Capital.

In an interview, Ahuja said that LightSquared plans to launch in its first markets by the middle of next year and hopes to have 92 percent coverage of the United States by 2015. He said the venture sees its customer base as a wide-ranging group including wireless carriers, device makers, and retailers such as Best Buy and WalMart that want to provide high-speed mobile services.

"We see a great diversity of customers to put to use one or all three propositions we offer," Ahuja said. "That would be satellite only, satellite and terrestrial or only terrestrial. This is one of its kind."

Today marks the launch of LightSquared™, a new nationwide 4G-LTE wireless broadband network integrated with satellite coverage that will revolutionize communications in the United States. As the nation’s first wholesale-only integrated wireless broadband and satellite network, LightSquared will provide wireless broadband capacity to a diverse group of customers, including retailers; wireline and wireless communication service providers; cable operators; device manufacturers; web players; content providers; and many others. The LightSquared network will allow these partners to offer satellite-only, terrestrial-only, or integrated satellite-terestrial services to their end users. This wholesale-only business model ensures LightSquared has no conflict of interest with its customers. LightSquared seeks to transform the wireless broadband industry to one that fosters innovation, creativity, and freedom of choice via the first truly open and net neutral wireless network.
First-ever wholesale nationwide 4G-LTE wireless broadband network integrated with satellite coverage allows partners to offer terrestrial-only, satellite-only, or integrated satellite-terrestrial services to their end users.
Telecommunications luminary Sanjiv Ahuja becomes Chairman and CEO, joined by a seasoned management team
First truly open and net neutral wireless network spurring the development of new wireless devices, applications, and services
Unique wholesale-only business model avoids conflict of interest with customers
LightSquared is announcing up to $1.75 billion in additional debt and equity financing
LightSquared network build-out anticipated to generate more than 100,000 direct and indirect private sector jobs within five years

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Nokia Research Center - Touchphone Browsing Survey

Tuesday, 20 July 2010 06:58 Micky

Anne Kaikkonen, Nokia's UX Product Manager is asking users of Touchscreen mobile devices to take part in a simple survey. The information is used in research investigating the changes in mobile Internet use due to the large touch screens.

Anne, Author of Handbook of Research on User Interface Design and Evaluation for Mobile Technology (Lumsden eds) carried out a similar survey back in 2007, and those results helped shape the devices of today, so if you missed that survey, now is a good time to take part, and help the development of the touch devices of the next generation of Nokia touch handsets.

You can find the Touchphone Browsing Survey here. The survey is in English, but the open questions can be answered also in Finnish, Swedish, German, Spanish, Italian and French.

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Nokia CEO Olli-Pekka Kallasvuo to be Replaced?

Tuesday, 20 July 2010 06:03 Micky

opk Whilst this is unofficial news, it is indeed still very interesting to see, and comes as no surprise with Nokia's market-share taking a bashing over the last couple of years.

Olli-Pekka Kallasvuo has been Nokia's CEO since 2006, and whilst its true that OPK was at the forefront of Nokia's high time 2007/08, since 2008, Nokia has failed to gain traction with the ever changing market place, with tough competition from Apple, and RIM in the high end devices market.

Wall Street Journal's writer, Joann S Lubin has published a recent article, stating that insiders at Nokia have made it perfectly clear that OPK's replacement is actively being sought, and the new CEO could even come from North America. Why look there I ask, I live in Finland, and I'm available for the role of new CEO. I'm not kidding either.

While Nokia continues to sell more cellphones than any other manufacturer, it has failed to keep up with advances by such rivals as Apple Inc. and makers of smartphones running Google Inc. operating software.

The Espoo, Finland, company's failure to get back in the race has taken a toll. Its stock rose eight cents to $8.82 in 4 p.m. New York Stock Exchange trading Monday but is off nearly 42% since April 19.

For the full Wall Street Journal article, head across here.

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Nokia Aquires $1.2 Billion USD of Motorola Wireless Network Infrastructure Assets

Monday, 19 July 2010 11:13 Micky

Nokia Siemens Networks and Motorola, Inc. today jointly announced that the companies have entered into an agreement under which Nokia Siemens Networks will acquire the majority of Motorola's wireless network infrastructure assets for USD 1.2 billion in cash. The companies expect to complete closing activities by the end of 2010, subject to customary closing conditions including regulatory approvals.

"This is an exciting acquisition that I believe has significant benefits for customers, employees and our shareholders," said Rajeev Suri, Chief Executive Officer of Nokia Siemens Networks. "Motorola's current customers will continue to get world-class support for their installed base and a clear path for transitioning to next generation technologies while employees will join an industry leader with global scale and reach. Nokia Siemens Networks will see the benefits of a deal that is expected to enhance profitability and cash-flow and to have significant upside potential."

"Motorola is very proud of the operational and financial performance of our Networks business and its employees, who will now become a valuable addition to Nokia Siemens Networks. We are excited to have reached this agreement to combine our Networks team with such an industry leader," said Greg Brown, Co-CEO of Motorola. "This is great news for our customers, our investors and our people and will allow us to sharpen our strategic focus on providing mission and business critical solutions for our government, public safety, and enterprise customers."

As part of the transaction, Nokia Siemens Networks expects to gain incumbent relationships with more than 50 operators and to strengthen its position with China Mobile, Clearwire, KDDI, Sprint, Verizon Wireless and Vodafone.

"We are pleased to be able to add new relationships with some customers, and reinforce our position with others," said Suri. "I believe the addition of Motorola's Networks business will significantly strengthen our worldwide presence, enhance our scale in the United States, Japan and other priority regions and reinforce our leadership position in the global wireless sector."

"Verizon views today's announcement as good news for the global wireless industry," said Richard J. Lynch, Executive Vice President and Chief Technology Officer of Verizon. "This deal brings together two important Verizon suppliers; we look forward to our continuing work with Nokia Siemens Networks."

Nokia Siemens Networks expects that based on revenue, with the addition of the Motorola wireless network infrastructure business, it will become the #3 wireless infrastructure vendor in the United States, the #1 foreign wireless vendor in Japan, and strengthen its current #2 position in the global infrastructure segment.

Motorola's networks infrastructure business provides products and services for wireless networks, including GSM, CDMA, WCDMA, WiMAX and LTE. This business is a market leader in WiMAX, with 41 contracts in 21 countries; has a strong global footprint in CDMA with 30 active networks in 22 countries; and a robust GSM installed base, with more than 80 active networks in 66 countries; and excellent traction with LTE early adopters.

"As customers look to transition from CDMA networks to next generation technologies, the addition of the Motorola wireless network infrastructure business is targeted to ensure that we are well placed to meet those needs," said Bosco Novak, head of Customer Operations at Nokia Siemens Networks. "Together, we will utilize the combined strength of Nokia Siemens Networks' TD-LTE solutions and Motorola's WiMAX and LTE businesses, to better meet customers' evolving technology and business needs."

Approximately 7,500 employees are expected to transfer to Nokia Siemens Networks from Motorola's wireless network infrastructure business when the transaction closes, including large research and development sites in the United States, China and India. Motorola retains the iDEN business, substantially all the patents related to its wireless network infrastructure business and other selected assets.

The companies expect to complete closing activities by the end of 2010 and therefore do not expect the transaction to have any impact on Nokia Siemens Networks' financial performance in 2010.

Nokia Siemens Networks and Motorola also are exploring a global relationship in the public safety arena. This relationship would combine Motorola's leadership in providing solutions to public safety organizations with Nokia Siemens Networks' commercial LTE solutions.

"This is an exciting acquisition that I believe has significant benefits for customers, employees and our shareholders," said Rajeev Suri, Chief Executive Officer of Nokia Siemens Networks. "Motorola's current customers will continue to get world-class support for their installed base and a clear path for transitioning to next generation technologies while employees will join an industry leader with global scale and reach. Nokia Siemens Networks will see the benefits of a deal that is expected to enhance profitability and cash-flow and to have significant upside potential."

"We are pleased to be able to add new relationships with some customers, and reinforce our position with others," said Suri. "I believe the addition of Motorola's Networks business will significantly strengthen our worldwide presence, enhance our scale in the United States, Japan and other priority regions and reinforce our leadership position in the global wireless sector."

"Verizon views today's announcement as good news for the global wireless industry," said Richard J. Lynch, Executive Vice President and Chief Technology Officer of Verizon. "This deal brings together two important Verizon suppliers; we look forward to our continuing work with Nokia Siemens Networks."