Nokia reported a net sales loss of €9.8 million for its third quarter, the first time the Finnish company has lost money this decade.

Analysts have blamed the recession, and growing competition from the BlackBerry and iPhone for the worse than expected result and declining market sahre.

Its net sales loss was down 20% year on year and down 1% sequentially, due to hefty charges on the Nokia Siemens Networks. The operating loss in Nokia Siemens Networks included a non-deductible impairment of goodwill charge of €908 million.

Nokia's shares (NAS: NOK) dove 11% following the shock loss.

Slipping smartphone share
In the key smartphone segment, where Nokia's high-end N-series and E-series handsets go head to head with the iPhone, BlackBerry and others, Nokia's market share slipped from 41% to 35% during the second quarter.

Devices and services were also down 20% year on year coming in at €691.5 million. Nokia’s operating loss was €436 million compared with an operating profit of €146.9 million, which represented an operating margin of -4.3%.

The operating loss of the Nokia Siemens Networks was €110.7 million, representing an operating margin of -40.1%.

In the third quarter 2009, net financial expense was €48 million compared with the first two-quarter results of a (net financial expense of €57 million. Loss before tax was €469 million. The results after taxes included a charge of €432 million recorded to provide a valuation allowance on Nokia Siemens Networks' deferred tax assets.

Loss was €13 million, based on a loss of €559 million attributable to equity holders of the parent company and a negative €354 million compared to a negative €32 million for the first two-quarters, which was attributable to minority interests.

Nokia’s earnings per share decreased to € -0.15 (basic) and €-0.15 (diluted), compared with €0.29 (basic) and €0.29 (diluted) in the third quarter of 2008.

Highlights included:

- Nokia net sales of EUR 9.8 billion, down 20% year on year and down 1%
sequentially (down 19% and flat at constant currency).

- Devices and services net sales of €6.9 billion, down 20% year on year and
up 5% sequentially (down 20% and up 6% at constant currency)

- Devices and services gross margin of 30.9%, down from 34.0% in Q2 2009.

- Services net sales of €148 million (billings of €172 million). Due to the divestment of the security appliance business in April 2009, services net sales are not directly comparable to prior periods.

- Estimated industry mobile device volumes of 288 million units, down 7% year on year and up 7% sequentially.

- Nokia mobile device volumes of 108.5 million units, down 8% year on year and up 5% sequentially.

- Nokia estimated mobile device market share of 38% in Q3 2009, at the same level as in Q3 2008 and in Q2 2009.