Nokia’s Q2 not all bad. Miss analysts’ hopes, not expectations

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By now you probably heard. Nokia’s apparently not doing as well as analysts would like. Sales fell by 24% from a year ago, and Nokia is still operating at a loss. But that’s not the whole story, and it turns out the public is focusing on the negative, even with so much positivity to be found in the report.

Nokia sold 7.4 million Lumia devices. That number isn’t including figures from their mobile phone sales. Analysts apparently expected  Nokia to sell 8 million Lumia smartphones during Q2, which I think is an unfair number to throw at a company that is on a  road to recovery. The way I see it, 7.4 million is not a bad number, especially considering Blackberry sold less overall phones that Nokia sold Lumias.

Also, sales may have fallen by 24% from a year ago, but looking at the quarter over quarter figures paints a different, less negative picture of how the company’s turnaround is doing. Nokia’s Q1 2013 saw a 27% drop in net sales from the previous quarter, compared to just a 3% fall in net sales during Q2. That looks like a major improvement to me, and if the company continues to see this kind of momentum, sales will rise fairly quickly in the coming quarters.

Lastly, Nokia may still be operating at a loss, but they’ve done a better job managing their spending than a year ago. According to USA Today, they reported a loss of about 227 million euros ($298. million). A year ago, they reported a net loss of 1.41 million euros. Once again, showing tremendous improvement.

Analysts can’t seem to make up their minds. They post high expectations because they seem to want Nokia to do well, but when the company falls short, it becomes clear that they don’t expect these figures, but they hope for these figures. Given the amount of positivity Nokia is getting from its rising marketshare in many countries, as well as its upcoming purchase of the remaining half of Nokia Siemens Networks, and the recent announcement of the Lumia 1020, analysts just needed something negative to focus on.

 

Nokia's shares fell and rose back up on July 18th following the release of the company's Q2 earnings report
Nokia’s shares fell and rose back up on July 18th following the release of the company’s Q2 earnings report

Shareholders are just as confused, and unfortunately easily influenced by the negative. They can’t seem to figure out whether or not to keep faith in the company, which is frustrating seeing as how I’m one of those shareholders. When it was reported that Nokia’s sales fell, the stock fell by approximately 3%, then rose back to the point it began as soon as the shareholders realized that the reports weren’t as bad as analysts were making them out to be. The stock currently remains slightly above $4, up about .20¢ from a month ago, and down about .20¢ from it’s highest point in about 6 months, which it reached earlier this month.

It’s much easier going downhill than it is going up, and Nokia is trudging its way to the top, pushing BlackBerry down and reaching up for Apple’s neck.

To get your own look at Nokia’s Q2 earnings report, follow the link.

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