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Nokia and Motorola suffer Q1 declines

Google's handset unit drags down otherwise strong quarter, while Nokia reports worst revenue figure since 1999

By CAROLINE GABRIEL

Published: 19 April, 2013

READ MORE: Financial | Nokia | Motorola | Advertising | Handset | Android | Windows Phone

Nokia and Motorola were once the titans of the handset industry, and in an echo of old times, they reported first quarter results on the same day - both talking up exciting devices to come, to put a gloss on lacklustre actual performance.

Motorola, now a unit of Google, posted a loss of $271m, dragging down otherwise strong figures at its parent, which was buoyed by new mobile advertising tools. Excluding one-off items, Motorola lost $179m, still higher than its year-ago loss of $86m, though well below its Q412 deficit of $353m.


Revenue was $1.02bn, one-third of the year-ago figure of $3.08bn as the firm continues to lose share, partly deliberately, as it winnows its product range to focus on a few key designs, and partly because of failure to ignite markets outside the US. Analysts had expected higher revenues in the first quarter. However, there was also the factor of the set-top box unit, which is being sold to Arris Group for $2.35bn. The impending sale means Google has moved the division's results to the

discontinued business section.

Google has previously warned that Motorola's results will be "variable" as the company restructures itself and rethinks its product line. It has promised to accelerate the process, begun when the vendor was independent, of focusing only on high end models and streamlining the portfolio.

Chairman Eric Schmidt said last week that the new products in the pipeline were "phenomenal" but Google is working through a 12-18 month product pipeline taken over with the company. The rumored new flagship will be the 'X Phone', which could make its debut at Google's I/O conference next month. It is not clear whether the search giant will give its controversial hardware unit a place in its own-brand Nexus initiative, which has so far relied on outside partners such as Samsung.

Google itself topped Wall Street forecasts with first quarter profit of $11.58 a share, excluding some items, as mobile advertising and video promotions boosted results. Q1 revenue, excluding sales passed on to partner sites, rose to $11bn.

Over at Nokia, the company announced a 20% year-on-year drop in sales to €5.85bn (7.7bn) with declines in all three of its divisions. This was the company's lowest quarterly revenue figure since 1999.

Handset sales were down by 32% at €2.9bn. This was expected as the Finnish giant continues to struggle with the loss of its legacy Symbian base and the transition to Windows Phone, as well as seeing intense competition in featurephone segments. But its Nokia Siemens infrastructure joint venture, which was a surprise star of the last quarters of 2012, also suffered a 5% drop in sales to €2.8bn while its best regarded business, Digital Mapping, saw a 22% fall to €216m. All that propelled the company to a net loss of €339m ($445m), less than last year's figure of €1.57bn in the red.

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