Nokia’s phone business saw a 30 percent drop in sales, to $2.67 billion from $3.83 billion a year ago, during its fiscal first quarter — the last full quarter before Microsoft’s deal to acquire the business closed last Friday.
Its operating losses widened to $451.87 million, up from $166.33 million a year ago, the company reported today.
Nokia attributed the losses mainly to decreased basic mobile phone sales and, to a lesser extent, lower smartphone sales.
“On both a year-on-year and sequential basis, our Mobile Phones net sales were affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio,” Nokia said in its earnings release.
Nokia also noted that the agreed transaction price of EUR 5.44 billion — $7.5 billion — for Microsoft to acquire Nokia’s Devices & Services business was increased by EUR 170 million — $235.6 million — due to adjustments made for estimated net working capital and cash earnings. That brings the cost of the acquisition up to $7.8 billion.
Excluding its phone operations, Nokia saw sales of $3.7 billion, a 15 percent decline from a year ago. Still, the results beat forecasts, and the company returned $3.1 billion to shareholders, according to Reuters.
Nokia also appointed Rajeev Suri, head of its networks division, as its new CEO and president, effective May 1.
Nokia shares were up 4 percent, trading at $7.33 this morning.