FINNISH PHONE MAKER Nokia has submitted its annual report to the US Securities and Exchange Commission (SEC) citing a €1.4bn loss for 2011.
Nokia didn't need an SEC filing to tell the world it had a terrible 2011, however it did attach a figure, a very large negative one, to Stephen Elop's first full year in charge of the firm. According to Nokia's SEC filing, the firm posted a €1.4bn loss during 2011 with decreased revenues and lower earnings per share.
Elop's decision to plump for Microsoft's Windows Phone operating system for its smartphone range has failed to jolt the firm into action, materialising in sales of €38.7bn, almost €4bn down from a year previously. After taking into account the cost of flogging its phones, research and development, administration and marketing expenses, close to a €1.1bn impairment to goodwill and tax all Nokia had left was a €1.4bn loss, hardly inspiring for the firm.
Nokia does have €9.2bn in cash and short-term assets, an increase of almost €2bn from 2010, meaning it isn't in dire straits but as management types like to say, the graphs are not pointing the right direction. The biggest problem is that Nokia's latest handsets don't look to be setting the world on fire, meaning there's seemingly no immediate respite from the lacklustre sales figures that have dogged the firm for years.
Last year Nokia announced that it would be significantly cutting back on its research and development efforts, but its SEC filing showed that it spent the best part of €6bn on this key area of its business. Elop might be faulted for trying to cut down expenditure in this area but as a businessman you can't argue against his decision, given that in three years and almost €18bn of research and development the most consumer facing result of this division is a 'pixel binning' algorithm to produce a 38 megapixel camera phone running on a dead operating system.
Nokia's €1.4bn loss during 2011 should be used by the firm to work out how its management processes are wasting the considerable investments the firm had previously made. Of course working out the mistakes in a firm as large as Nokia could take a long time and a few more eye watering SEC filings. µ
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