There were no big surprises in the second quarter earnings report from Nokia Corp. (NYSE: NOK) this morning. A month ago the company warned that quarterly revenues for its devices and services division would come in at or near the low end of its announced range, 6.7-7.2 billion Euros. As it turned out, that key figure totaled 6.8 billion Euros. EPS, excluding items, met estimates of 0.11 Euros. For the same period a year ago, Nokia posted EPS of 0.15 Euro.
Nokia has struggled with intense competition from Apple Inc. (NASDAQ: AAPL) and Research in Motion Ltd. (NASDAQ: RIMM) in the smartphone market. The Finnish company simply has not been able to match the capabilities of the iPhone or the Blackberry. Nokia hopes to turn that around later this year when it releases a new smartphone, the N8, which uses an operating system the company has dubbed MeeGo, developed in conjunction with Intel Corp. (NASDAQ: INTC).
The company also stumbled in its joint venture with Siemens AG (NYSE: SI), Nokia Siemens Networks, NSN, where operating margins fell nearly 6%. NSN agreed earlier this week to buy the wireless network equipment division of Motorola Inc. (NYSE: MO) for $1.2 billion. NSN hopes to leverage the purchase to boost its position as a supplier of network infrastructure for the build-out of 4G networks.
Nokia reiterated its devices and services group’s third-quarter revenue outlook at 6.7-7.2 billion Euros. The company’s outlook for sales at Nokia Siemens Networks is 2.7-3.1 billion Euros, compared with sales of 3.04 billion Euros in the second quarter and 3.2 billion Euros in the same period a year ago.
Further prognostications include an overall volume increase in the mobile device market of 10% year-over-year for 2010. Nokia expects its share of that market to be “slightly lower” compared with 2009. For the second quarter, Nokia estimates that its share for the entire mobile device market totaled 33%, down from 35% in the same period a year ago.
Nokia shares are trading up about 4.5% at $9.20 after the open in early trading. The ADR’s price today versus 52-week trading range of $8.00 to $16.00 probably sums this story up more than anything.
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