Nokia's Q3 show phone sales down by a fifth

This can hardly be encouraging news: Nokia's third-quarter financial results show the number of handsets it sold down by 22 percent compared to last year and 1 percent on the quarter before.

The company said Thursday it sold 82.9 million handsets in the quarter, with revenue from phone sales falling by 34 percent compared to Q3 2011.

Nokia's overall revenue also dropped during the quarter, to 7.239 billion euros ($9.48 billion) -- a decrease of 19 percent year on year, and 4 percent quarter on quarter -- compared with $12.2 billion in the third quarter of 2011.

The Finnish mobile maker posted an operating loss of 576 million euros ($754 million) in the quarter just ended.

Nokia's earnings per share (EPS) -- income attributed to the firm's shareholders -- fell in the quarter, coming in at -0.26 euros (-$0.34) per share. Non-IFRS figures, before one-time items, reduced it to a loss of 0.07 euros a share, compared to a profit of 0.03 euros a year earlier. Analysts had forecast an EPS loss of 13 cents a share and revenue of $9.02 billion, according to Thomson Reuters.

Nokia said it sold 77 million non-smartphone handsets during Q3 2012, an increase of 4 percent quarter-on-quarter, but a decrease of 15 percent year-on-year. The company also sold 6.3 million smartphones in the quarter, while volumes of its flagship Lumia Windows Phone devices decreased quarter-on-quarter to 2.9 million units. Research firm Strategy Analytics said it expected the firm to sell 8 million smartphones in the third quarter of 2012, compared to rival firm Samsung's 55 million and Apple's 27 million iPhones.

Nokia Group ended the quarter with gross cash of 8.8 billion euros -- $11.5 billion -- and net cash of 3.6 billion euros, or $4.7 billion.

CEO Stephen Elop said in a statement:

"As we expected, Q3 was a difficult quarter in our Devices & Services business; however, we are pleased that we shifted Nokia Group to operating profitability on a non-IFRS basis. In Q3, we continued to manage through a tough transitional quarter for our smart devices business as we shared the exciting innovation ahead with our new line of Lumia products. In our mobile phones business, the positive consumer response to our new Asha full touch smartphones translated into strong sales. And in Q3, our mobile phones business delivered a solid quarter with sequential sales growth and improved contribution margin.

In Location & Commerce, we made progress establishing our platform offering with customers like Amazon. This is in line with our plan to expand our location offering to more customers. And, Nokia Siemens Networks had a remarkable quarter in which we achieved record profitability on a non-IFRS basis and the Nokia Siemens Networks cash balance increased for the fourth quarter in a row.

While we continue to focus on transitioning Nokia, we are determined to carefully manage our financial resources, improve our competitiveness, return our Devices & Services business to positive operating cash flow as quickly as possible, and ultimately provide more value to our shareholders."

Nokia has already laid off close to 10,000 employees in 2012 in the name of restructuring, while its attempts to lower operational expenditure have cost the firm $590 million in the last quarter alone. By the end of 2013, the company believes it can further reduce its device and service operation cost to $3.93 billion per year.