Nokia Q2 'clearly disappointing,' admits Elop, outlining turnaround plans

The saving-grace for Nokia, in what may have otherwise been an entirely grave second-quarter earnings report, was the patent royalties it now receives from Apple — the company actually most responsible for its first quarterly losses in handset sales since 2009.

The royalties amounted to 430 million Euro, or approximately $618.3 million U.S., with Nokia reporting second-quarter operating profit of approximately $555 million (or 391 million Euro) and sales of 16.7 million smartphones.

The results were "clearly disappointing," Nokia CEO Stephen Elop said in a statement. Overall, Nokia today posted a loss of 368 million euros, or $523 million, for the quarter.

"The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011," Elop added. "However, even within the quarter, I believe our actions to mitigate the impact of these challenges have started to have a positive impact on the underlying health of our business."

Nokia's first Microsoft Windows Phones (MDP: Did Nokia's Elop Just Show a (Fuzzy) Nokia Windows Phone?) can't come soon enough.

Other recent moves expected to help staunch the bleeding, said Elop, include:

• recent moves in China and Europe to address inventory build-up;

• a more responsive approach to global product pricing;

• plans to release more Dual SIM handsets this year;

• and, beginning this year, plans for a "sequence of concentrated product launches in specific countries, systematically increasing the number of countries and launch partners" for its Windows Phone devices.

There has also been its employee reductions, its outsourcing of Symbian to Accenture and ventures such as Invent with Nokia, which encourages inventors to share ideas. (Unfiltered: Nokia CTO leaving just as things are getting good.) Plus, taking advantage of that patent portfolio that saved the day, it seems Nokia may take a look around to make sure all other "industry participants are properly licensed" and there aren't a few more royalty dollars to be made.

Some progress is already evident, and thus we are targeting to end this year with more net cash ad liquid assets than at the end of Q2 2011," said Elop.

"We firmly believe that our deliberate and unwavering commitment to making the changes necessary at Nokia is the right way to deal with the disruptive forces in our industry and drive value creation for our shareholders."