Nokia's operating profit plunges 96%
16th Apr 2009 | 12:17
Even the biggest aren't immune to the Credit Crunch Monster
Nokia's Q1 financial results make for some pretty grim reading after it was announced the company has made losses in nearly every area, as well as seeing a real decline in handset sales.
One of the scariest stats comes when looking at operating profit, where Nokia's Q1 2009 results showed operating profit decreased 96 per cent to €55 million (£49 million), compared with EUR 1.5 billion (£1.32 billion) in Q1 2008.
Net profits also plummeted to 122m Euros (£108m) in the same quarter in year on year terms, down from €1.2 billion (£1.05 billion) in 2008.
More worrying for the company is the fact that customers are holding back on purchasing new handsets. The company's sales in every geographic area were down by at least 13 per cent year on year, with the notable exception of North America, where Nokia has struggled in recent years, growing 30 per cent (although it has the lowest volume of sales in that region).
Losing Latin love
Latin America suffered the biggest slide, with only 6.6 million handsets sold there in Q1 2009 compared to 11.9 million the previous year. Nokia has previously enjoyed decent sales in emerging markets for its lower-cost handsets, with Africa and Greater China all showing a sales slump.
Unsurprisingly, Nokia CEO Olli-Pekka Kallasvuo was more buoyant about the results: "In what has been an exceptionally tough environment, we continue to invest in a focused manner in consumer Internet services delivered across our broad portfolio of mobile devices. Combined, these solutions will drive our future growth.
"As an example in Q1, I am especially pleased with the performance of our first mass market touch product, the Nokia 5800 XpressMusic. Together with Comes With Music, it is a great example of Nokia providing solutions that consumers value.
"Regarding the health of the overall mobile device market, the inventory already in the sales channels decreased substantially during Q1 due to extensive destocking by operators and distributors. This adversely impacted our sales volumes in the quarter. However, it has also resulted in the demand picture becoming more predictable as we enter the second quarter."
See the full set of results in black and white glory here.