), the beleaguered mobile handset developer and network
infrastructure manufacturer, reported mixed financial results for
the third quarter of 2013. However, the company continues to lose
market share in the mobile device market despite witnessing
sequential growth of its flagship Lumia series of smartphones.
Nokia currently has a Zacks Rank #3 (Hold).
Quarterly net loss was approximately $137.7 million or 2 cents
per share compared with a net loss of $1,180 million or a loss of
33 cents per share in the prior-year quarter. However, quarterly
adjusted (excluding special items) earnings per share of 1 cent
were better than the Zacks Consensus Estimate of a break even. On
the other hand, quarterly net revenue was approximately $7,814
million, a stiff year-over-year fall of 21.8% and well below the
Zacks Consensus Estimate of $7,842 million.
Quarterly adjusted gross margin was 31.7% compared with 27.6%
in the prior-year quarter. Adjusted operating margin, in the
reported quarter, was 3.8% as against 1.2% in the year-ago
quarter. During third-quarter 2013, the company generated $11.9
million of cash from operation compared with cash consumption of
$568 million in the year-ago quarter. Free cash flow, in the
reported quarter, was a negative $84.8 million as against a
negative $658 million in the year-ago quarter.
At the end of the third quarter of 2013, Nokia had
approximately $12,587 million of cash and marketable securities
compared with $11,722 million at the end of 2012. Total debt, at
the end of the reported quarter, was around $8,901 million as
against $7,003 million at the end of 2012. The
debt-to-capitalization ration at the end of the third quarter of
2013 was 0.41 compared with 0.36 at the end of 2012.
Devices & Services Segment
Quarterly total revenue was approximately $3,838 million, down
18.7% year over year. Within this segment, Smartdevices revenues
were $1,661 million, up 28.5% year over year. Mobile Phones
revenues were $1,972 million, down 37.1% from the year-ago
quarter. Other revenues were $205 million, down 29.9% year over
year. Quarterly adjusted operating loss for this segment was
approximately $114 million, down 87.2% year over year. Adjusted
operating margin was a negative 3% compared with a negative 18.9%
in the prior-year quarter.
Smartphones average selling price (ASP) was $189.4, down 8%
year over year. Mobile Phone ASP was $35.8, down 13% year over
year. In the third quarter of 2013, Nokia shipped 8.8 million
Lumia smartphones, up 40% from the prior-year quarter and 64.6
million Mobile Phones (including 5.9 million Asha full-touch
phones), down 22% year over year. Nokia lost its global mobile
phone leadership to Smasung, which manufacturer smartphnes
integrated with the Andriod software of
). Recently, Nokia has decided to divest its Devices and Services
) for approximately $7.2 billion in cash.
Nokia Solutions and Networks Segment
Quarterly total revenue was approximately $3,433 million, down
26% year over year. Quarterly adjusted operating profit was
approximately $220 million, down 9.3% year over year. However,
adjusted operating margin was 6.4% compared with 5.3% in the
prior-year quarter. Nokia has purchased the remaining 50% stake
of this division from
) for $2.2 billion.
Quarterly total revenue was approximately $279 million, down
20.4% year over year. Quarterly adjusted operating profit was
$18.5 million compared with an operating loss of $74 million in
the prior-year quarter. Adjusted operating margin was 6.6%
compared with a negative 21.1% in the year-ago quarter.
For the fourth quarter of 2013, adjusted operating margin for
the Nokia Solutions and Networks segment will be 12% plus or
minus 4%. Nokia further expects to reduce operating expenses in
this segment by more than €1 billion by 2013 from the 2010 level
of €5.35 billion. Management aims to reduce its Devices &
Services segment's adjusted operating expenses to around €3
billion by the end of 2013.
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