Its second-quarter revenues reached €3.34 billion (US$4.1 billion), a 13 percent improvement compared with a dismal first quarter, but down 8 percent compared with a year ago. Table 1: NSN Key Financials Q2 2012
|In millions of euros||Q2 2011||Q2 2012||Y/Y change||Q1 2012||Q/Q change|
|Reported operating profit||-111||-227||-105%||-1,005||77%|
|Adjusted operating profit*||40||27||-33%||-147||na|
|* Excluding one-time costs and special items|
Like its rivals Ericsson AB (Nasdaq: ERIC), Alcatel-Lucent (NYSE: ALU) and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), NSN experienced a dip in revenues from China, with sales from that key market dropping by 16 percent year-on-year to €340 million ($418 million), though its revenues from China did increase sequentially. The company also stated that its more focused strategy, announced last November, also affected revenues. (See Ericsson Sets Q2 Benchmark, AlcaLu Issues Full-Year Profit Warning, ZTE Issues H1 Profit Warning and Analysts: NSN Focus Makes Sense.)
In line with its main rival Ericsson, NSN also noted a dip in network infrastructure sales and an increase in services revenues, though the company doesn't provide any specific sales figures for its lines of business.
Its gross margin was 26.6 percent, unchanged sequentially or year-on-year. (Ericsson's second-quarter gross margin was 32 percent.)
NSN's operating loss, while not as dramatic as that of the first quarter, was still a long way from being break even at €227 million ($279 million), or 6.8 percent of sales, way worse than a year ago.
Excluding one-time costs, including restructuring charges of €190 million ($234 million), NSN's operating income was €27 million ($33.2 million), worse than a year ago but better than the first quarter. NSN said it has reduced its headcount by about 10,000 staff since the end of 2011: It had 63,328 staff at the end of June. (See NSN Could Lose More Than 17,000 Staff.)
— Ray Le Maistre, International Managing Editor, Light Reading