Even for a company the size of Nokia (NYSE: NOK), a quarterly loss of $834 million is still a big deal. And, this is what the company posted for its Q3 report (it's the first net loss since 1996).
OK, the main reason for the red ink was the write-down of a joint venture with Siemens that develops network equipment. No doubt, the business has been brutal. But, Nokia somehow thinks there's potential for growth.
However, this is not the whole story. In Q3, overall sales plunged 20%.
One reason is a shortage of components. Interestingly enough, this is an indication of a pick-up in global demand.
But there is also some bad news. That is, Nokia is continuing to feel the pressure from its rivals, such as Research In Motion (NYSE: RIMM) and Apple (NASDAQ: AAPL). Although, it looks like the iPhone is the biggest threat. Hey, who really talks about Nokia phones, anyway?
Keep in mind that Apple is ramping up its efforts in Europe, which should mean more problems for Nokia.
And, Wall Street is definitely concerned. In morning trading, the shares of Nokia are off 10% to $13.75.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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Reader Comments (Page 1 of 1)
10-22-2009 @ 1:08PM
Beltway Greg said...
Nokia just threw in the towel and declared themselves unable to compete.