Nokia (NYSE:NOK) offered a ray of sunshine to battered investors with second-quarter results that surpassed some expectations. Perhaps most importantly, the company reported Lumia smartphone sales that were above estimates--Nokia said it sold 4 million Lumia phones during the period, while analysts had expected the company to report sales of around 3.8 million, according to Bloomberg.
As a result, Nokia's stock popped around 8 percent to around $1.87 per share.
Notably, Nokia reported shipments of 600,000 devices in North America in the second quarter. Since Nokia's Lumia phones are the only devices the company is pushing in the North American market, it's reasonable to assume that Nokia sold 600,000 Lumia smartphones in the United States and Canada during the quarter. Worryingly, Nokia sold the same number--600,000--in the North American market in the first quarter of this year.
However, the North American sales figure is larger than some analysts have forecast.
Despite the larger than expected overall Lumia sales, Nokia remains in a treacherous place. The company continues to lose market share to the likes of Apple (NASDAQ:AAPL) and Samsung Electronics, and question marks still hang over the company's bet on Microsoft's (NASDAQ:MSFT) Windows Phone smartphone operating system.
Indeed, Nokia's missteps in the market were highlighted by a recent Wall Street Journal article, which reported that fully seven years before the release of the iPhone Nokia engineers showed off a color touchscreen smartphone with a single button that could complete a variety of computing tasks. However, the device never went into production due to a corporate culture that was unable to commercialize the company's research and development efforts.
In his comments regarding the second-quarter results, Nokia CEO Stephen Elop both acknowledged the company's problems and its efforts to correct its course: "Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources," Elop said. "We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products over time, well beyond the launch of Windows Phone 8. We believe the Windows Phone 8 launch will be an important catalyst for Lumia."
Nokia said it shipped a total of 73.5 million mobile phones in the second quarter, an increase of 2 percent from the same quarter a year ago. The company shipped 10.2 million "smart devices" in the quarter, a 39 percent decline from a year ago and reflective of the company's transition from Symbian to the nascent Windows Phone platform.
Nokia's net sales fell 19 percent from the second quarter of last year to the second quarter of this year. The company's net sales in its critical Devices & Services business fell 26 percent during that same period. Nokia's second-quarter net loss was $1.7 billion, which according to Bloomberg was much wider than the expected $784 million net loss.
To right its ship, Nokia has undertaken a massive restructuring plan that includes the elimination of a whopping 10,000 jobs. Nokia's Elop said the restructuring efforts are progressing as expected.
Summed Elop: "While Q3 will remain difficult, it is a critical priority to return our Devices & Services business to positive operating cash flow as quickly as possible."
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