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Nokia reports quarterly loss that includes cash infusion from Microsoft

Nokia 4th Quarter 2011 Report

Nokia has released its fourth quarter financial report for 2011. While the good news is that the company is reporting the shipment of over 1 million Windows Phones, the bad news is that Nokia has experienced the third straight quarterly loss.

Nokia's revenue dropped 21% from last year and profit dropped from €884 million (about $1.1 billion U.S) to €954 (about $1.25 billion U.S.) loss. While Nokia is pleased as punch about shipping over a million Windows Phones, overall smartphone revenue dropped 38% and overall smartphone shipments dropped 8%.

On the positive, Nokia reported an infusion of €180 million ($250 million U.S.) from Microsoft in the form of platform support payments. The strategic agreement with Microsoft covers both platform support from Microsoft and minimum software royalty payments from Nokia to Microsoft. The life of this strategic agreement is expected to measure in billions of US Dollars.

Overall, Nokia's CEO Stephen Elop was pleased with the performance of their mobile phones business citing the release of the Windows Phone Lumia series (Lumia 710 and 800), introducing the series to consumers in Europe, Hong Kong, India, Russia, Singapore, South Korea and Taiwan.

With the third straight quarterly loss, Nokia's hopes are likely riding on the company's re-entry into the North American Market (with the T-Mobile Lumia 710 and AT&T Lumia 900) and the success of the Windows Phone line world wide. Additional expansion will see the Lumia Windows Phones to China and Latin American markets during the first half of 2012. Hopefully, the global distribution will stop the downhill slide and give Nokia a positive first quarter report in 2012.

You can find all the numbers and stats from Nokia's fourth quarter report of 2011 here at Nokia.com.

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Reader comments

Nokia reports quarterly loss that includes cash infusion from Microsoft

21 Comments

I wonder if the 250 large had anything to do with them going with WP7 over keeping meego or going with Android. 

Not sure they're relying on the North American market George? Surely they/re going to be at a loss initially thanks to all the advertising & product development spend? If anything they won't expect profit until later this year

You never know.

It will likely be a net loss but expanding markets (including North America) should give Nokia a boost in revenue numbers.  Justifying the cost of advertising and product development as an investment expense.  It'll give them a banner to fly with improved revenues that investors and shareholders will like.  I just wish they would shorten their financial statements.... still a little cross-eyed from reading it.

I wouldn't be too concerned about these results. We all agree adopting Windows Phone as the smartphone platform of choice was a much better decision than staying oncozy yet boring Symbian. I have been a Symbian user for many years and I agree the change in mindset required for going from a Nokia E71 to a Windows Phone is pretty huge (there are still many areas where Symbian beats WP7 to a pulp), but the fact is that iOS, Android, WP7 are the future, and nothing good could come from staying on what Elop so accurately described as the burning platform.
I'm no analyst, but I expect Nokia to have another couple of rough quarters until it can pick up the pace and ship dozens of WP7 models per year, as it continues to do with the Symbians. The Lumia 800 is completely out of stock in Spain and that can only be good news from a brand awareness perspective.

Shouldn't this be the other way round ???
"Nokia's revenue dropped 21% from last year and profit dropped from €884 million (about $1.1 billion U.S) to €954 (about $1.25 billion U.S.). Or am I missing something very obvious ?

They went from +€884 million (profit) last year to -€954 million (loss) this year. This post doesn't make that very clear.

Really George?  You couldn't have used a more positive headline like 'Nokia Lumia devices sold are 1 million+'?

lol, i think its ok, you know reverse psycology
 
going in thinking "oh no!" then come out "yes! 1 million wp!" is way better than the other way around

Is anyone really surprised they posted a loss. 2011 was a year of transition for Nokia and Elop made sure everyone knew that. 2012 will be a much better year for them and if the frequency of Lumia 710 commericials I see on the US channels is any indication of the level of committement that Nokia will bring to this endeavour.

Lets not forget that the majority of the Nokia phones have just started selling around the world, of course there's going to be what seems to be a loss in this past quarter, the plus side will def show up ounce phone sale goes up.

I have nearly 1/3 of my retirement fund in NOK. Today showed something very promising. Given the reported loss the stock is still up almost 4%. What that tells me as an investor is they finally have some major players on there side and they have NOK's back. I have not seen this since I first bought into the company almost a year ago.
 

Not bad for only shipping units in less than two months. Remember they came out in November. So the numbers is only for half the the quarter.