Nokia Q2 2011: 'clearly disappointing' results as challenges prove 'greater than expected'

With Nokia still yet to fully dive in to the Windows Phone swimming hole, you had to know it was going to be another ugly quarter's worth of results. And it is. The company just posted its Q2 2011 numbers and there's a definite downward trend. Operating profits declined 44 percent since Q1, 391 million Euro compared to 704, and net sales of mobile devices are down 23 percent over the same period -- 20 percent compared to Q2 last year. CEO Stephen Elop quite naturally tried to spin this thing in the right direction:

The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011. 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. Most importantly, we are making better-than expected progress toward our strategic goals.

But, he can't deny the obvious, calling the results "clearly disappointing." Looking forward, Elop expects "competitive pressures to continue," but indicates the company has a "clear strategy" to improve things. He says those who have seen the company's early Windows Phone devices (really, who hasn't) are "very optimistic" about their potential and that they hope to launch this year with a "sequence of concentrated product launches. Very expensive launches, we hear.

Update: Elop just wrapped up his portion of the company's earning call. A summary and a few choice quotes are available below.

In the earnings call, Stephen Elop didn't rock the boat, more or less sticking to the company line by talking up the company's "immediate actions" to address the current state of the market, which he states has largely shifted from a "battle of devices to a war of ecosystems." The company's ecosystem of choice is now, of course, Windows Phone, and Elop says he has "increased confidence" that the first Nokia WP7 devices will ship this year. Yes, "increased confidence," meaning there's still room for a slip, and he reconfirmed that those phones won't ship in volume until 2012.

Elop also talked about the company's intellectual property victories, most notably against Apple. There was "significant intellectual property income" this quarter and he re-iterated that "intellectual property is an important currency" these days, which leaves us wondering what company we'll next be digitally inserting into the salmon's mouth.