Nokia Shares Slide After Lumia Sales Miss Estimates

Nokia continued to struggle in the second-quarter, posting a loss of $151 million (€115 million) on revenue of $7.46 billion (€5.695 billion),  slightly better than analyst expectations.  However, Nokia shares slid after it shipped 7.4 million phones last quarter, missing estimates by 700,000.

Analysts paid particular attention to the company’s smartphone average sales price (ASP), which tumbled from 191 euros to 157 euros in just three months as customers moved to its lower-cost Lumia 520 from its flagship Lumia 920.   Analysts expected higher sales of phones, especially since customer are moving toward the less-expensive Lumia 520, which made the shipment miss even more disappointing.

Nokia reported overall smartphone volume of 7.4 million units, up from 6.1 million last quarter.  Analysts were looking for more like 8.1 million units. Despite the miss, Nokia has edged out BlackBerry in smartphone sales for the first time, selling more Windows Phones last quarter than BlackBerry sold phones.   In the first quarter, BlackBerry had the edge over Nokia, selling 6.2 million smartphones.  But with the recent surge in Lumia 520’s, Nokia now has the edge over BlackBerry.

The surge in Nokia’s Window’s Phones is further evidence that Windows Phone is the third-place platform for smartphones.  In fact, more developers are planning on developing for Windows Phone in the next quarter than for BlackBerry.

Despite the surge in sales, Nokia still has a ways to go to start turning a profit.  Nokia is planning restructuring its Mobile Phones business, which will affect up to 440 employees globally.  The current quarter also didn’t take into account the complete results of Verizon’s flagship Lumia 928, which wasn’t released until the middle of the quarter.

Next quarter will be the make or break quarter for Nokia as a more complete picture of its sales will emerge.  The  Lumia 925 (T-Mobile) will be counted and its Lumia 1020 (AT&T) will also hit the market.  The 1020 is of particular interest as it will go head-to-head with the iPhone 5 and Galaxy S4.