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Nokia Losses Hit 1.4bn Euro In Second Quarter

(c) Sky News 2012

Mobile phone maker Nokia (Stockholm: NOKI-SEK.ST - news) has revealed plummeting revenues, with second quarter losses four times that the firm suffered in 2011.

Nokia posted a Q2 loss of 1.41bn euro (£1.1bn), which was double the loss expected by analysts.

The Finnish company, which is struggling with an extensive restructuring, acknowledged that the three-month period, which also saw sales plunge by 19% year-on-year, had been "a difficult quarter".

Nokia shares have lost around 80% since February 2011, when the company decided to drop its own smartphone software in favour of the largely untried Windows operating system.

But shares in the company were boosted after the Q2 announcement and were some 10% up after the results.

Nokia reported holding net cash of 4.2bn euro (£3.3bn), compared with the market's estimate of 3.7bn euro (£2.9bn).

"After a seemingly endless run of bad news, these results offer a glimmer of hope for Nokia," Ovum analyst Nick Dillon said.

In the three months to June, all three major credit ratings agencies cut Nokia bonds to "junk", while the company warned twice on profits and said it planned to cut 20% of staff.

Once the world's dominant mobile phone maker, Nokia was late to embrace smartphones and has lost out to Apple (NasdaqGS: AAPL - news) and Samsung in the most profitable part of the market.

Ironically, the firm had developed conceptual smartphone and tablet devices in the 1990s, but did not exploit the technology.

Nokia has tried to fight back with its new Lumia range phones running Microsoft (NasdaqGS: MSFT - news) software, but they have had relatively little success among consumers, who are choosing Apple's iPhones and phones running Google (NasdaqGS: GOOG - news) 's Android software instead.

Nokia sold four million Windows phones in the second quarter – roughly doubling from the first quarter - but still only a fraction of Apple's expected sales of 30 million iPhones or Samsung's 50 million smartphones.

Amid the declining fortunes for Nokia, some in the industry still hold hopes on a successful turnaround for the brand.

"There are still many reasons to be optimistic about Nokia so don’t write them off. Their Windows handsets are great phones and they have a strong product pipeline that will excite customers," Carphone Warehouse chief commercial officer Graham Stapleton said.

"A strong Nokia will drive innovation and increase competition which can only benefit customers and the wider industry.

"Their turnaround won’t happen overnight but I’m confident they will succeed."