As Nokia takes big hit on NSN, Google says recession is over

Finnish vendor Nokia shook the market on Thursday, announcing a surprise loss of €913m for the third quarter of 2009, compared to a profit of €1bn in the same period last year. The hit was due to a €908m impairment charge against goodwill associated with infrastructure unit Nokia Siemens Networks.

Overall sales were down 19.8 per cent year on year from €12.2bn to €9.8bn, affected by weaker performance by both the handset and infrastructure divisions. Devices & Services net sales were down 20 per cent year on year to €6.9bn as device shipments sank 8 per cent year on year to 108.5 million units, leaving market share unmoved at 38 per cent.

NSN net sales were down 21 per cent year on year €2.8bn and after the impairment charge Nokia said it no longer carries any goodwill with regard to NSN.

On Friday, the firm had a reshuffle, shifting Nokia CFO Rick Simonson to head up the Mobile Phones division, while Timo Ihamuotila, currently global head of sales, will transfer to the role of CFO as of November 1.

Fellow Scandinavian handset manufacturer Sony Ericsson also reported financials this week, watching its net loss for the third quarter increase to €164m, compared to a loss of €25m in the same period last year.

Sales dropped to €1.6bn for the three month period, down from €2.8bn in 2008, while unit shipments were down 45 per cent year on year to 14.1 million, giving it a market share of about 5 per cent.

But not to worry, the recession is all but over, says Google, which on Thursday reported an increase in net profit for the third quarter to €1.6bn from €1.3bn in the same period last year.

During the earnings call, Eric Schmidt, CEO of Google, said “While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future.” Part of that focus will be on mobile, where Google’s Android platform is gathering momentum.

“Mobile is a high-growth business for us already with 30 per cent quarter-over-quarter growth in mobile searches in the third quarter,” Schmidt said.

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