Nokia has announced it lost $1bn in the second quarter of 2012.
While it sold four million Lumia smartphone devices, up from two million last quarter, it lost money overall because sales of its other phones fell quicker than the growth of its new lines.
Nokia has now sold around seven million Lumia devices, but only 600,000 in the United States last quarter.
Overall its sales and services revenue decreased by 5% quarter-on-quarter.
It sold 83.7 million phones, up from 82.7 million in the previous quarter.
Compared to 2011 its net sales were down 19% while operating losses grew from €287m to €826m.
Nokia added that it expects the third quarter of 2012 to also be tough, due to "product transitions". Sales of its Lumia phones are expected to dip ahead of the introduction of Windows Phone 8, because the new OS won't run on existing devices.
However Nokia added that its cash stocks actually rose by around $125m in the quarter, year-on-year, thanks mainly to licensing payments.
More to follow.
Stephen Elop, Nokia CEO, said:
"Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources.
We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products over time, well beyond the launch of Windows Phone 8. We believe the Windows Phone 8 launch will be an important catalyst for Lumia. During the quarter, we demonstrated stability in our feature phone business, and enhanced our competitiveness with the introduction of our first full touch Asha devices. In Location & Commerce, our business with auto-industry customers continued to grow, and we made good progress establishing our location-based platform with businesses like Yahoo!, Flickr, and Bing. We continued to strengthen our patent portfolio and filed more patents in the first half of 2012 than any previous six month period since 2007. And, we are encouraged that Nokia Siemens Networks returned to underlying operating profitability through strong execution of its focused strategy.
We are executing with urgency on our restructuring program. We are disposing of non-core assets like Vertu. We are taking the necessary steps to restructure the operations of the company, which included the announcement of a new program on June 14. Faster than anticipated, we have already negotiated the closure of the Ulm, Germany R&D site, and the negotiations about the planned closure of our factory in Salo, Finland are proceeding in a collaborative spirit.
We held our net cash resources at a steady level after adjusting for the annual dividend payment to our shareholders. While Q3 will remain difficult, it is a critical priority to return our Devices & Services business to positive operating cash flow as quickly as possible."
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