Nokia has published its Q1 2012 financial performance and its loss was massive: $1.7 billion (€1.34), to be exact.

The struggling Finnish phone giant posted the operating loss even though it actually had sales of $9.7 billion (€7.4 billion).

The loss comes as the company recorded a 52 percent decrease in its sales of smartphones when compared to the same quarter of last year.

Nokia sold 11.9 million smart devices for the just-ended quarter compared to 24.2 million in the same quarter last year.

Furthermore, Nokia also posted a decrease in sales of its non-smart devices – a 32 percent drop in sales year-on-year.

According to Nokia, it sold 82.7 million mobile devices in the quarter compared to 108.5 million units in Q1 2011.

The massive loss has made Nokia post a 13 percent decrease in its net cash and other liquid assets compared to the fourth quarter of last year.

Nonetheless, Nokia says that its balance sheet “remains strong” with €9.8 billion ($12.9 billion) gross cash and €4.9 billion ($6.4 billion) at the end of the first quarter.

A good chunk of the massive loss posted by Nokia came from Nokia Siemens restructuring and relocating their manufacturing facilities to Asia.

Nokia posts a $1.7 billion loss in the first quarter of 2012. Image: Erkka P. / Flickr (CC)

Nokia CEO Stephen Elop says that his company is currently in an important transition period and he still remains upbeat about the future of Nokia.

Commenting on the Q1 2012 results, here’s Elop’s full statement:

“We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly. Over the last year we have made progress on our new strategy, but we have faced greater than expected competitive challenges.

We have launched four Lumia devices ahead of schedule to encouraging awards and popular acclaim. The actual sales results have been mixed. We exceeded expectations in markets including the United States, but establishing momentum in certain markets including the UK has been more challenging.

At the same time, the lower price tiers of our industry are undergoing a structural change, and traditional feature phones are challenged by full touch devices. As a result we are taking deliberate measures to continue to renew our Series 40 platform, and we plan to strengthen our line-up in Q2 2012. We are making investments in our Mobile Phones business unit aimed at addressing the gaps in our offering.

We have a clear sense of urgency to move our strategy forward even faster. We are pursuing step function changes by having launched the Lumia 610 and Lumia 900 in the first quarter, expanding market coverage, increasing advertising, introducing key customer-requested features and broadening our most successful go-to-market activities. At the same time, we have focused our efforts in the low-end of smartphones and feature phone asset to drive improved business results and conserve cash.

We are confident in our strategy and focused on responding urgently in the short term and creating value for our shareholders in the long term.”

Nokia plans on getting out of the red for the coming quarters by continuing its implementation of its smartphone strategy, expanding its Windows Phone Lumia portfolio, expanding its markets and leveraging good launch of phones like its launch of the Lumia 900 with AT&T this month.

Nokia, nonetheless, has to do more, some observers note as the company will run into the ground if this kind of performance continues into the future even though the company still has a generous pile of cash in its coffers.

Microsoft seems to be in full support of Nokia, however, as the software giant is revealed to have made a sizeable £250 million “quarterly platform support payment”.

About Solon Harmony Dolor

A passion for technology and journalism makes this upcoming writer very interested in social media and technology news. Fresh from finishing an English and Journalism degree from the University of the Philippines Diliman, he aims to bring interesting news to our readers .