Nokia Announces Q4 Profit; Things Looking Up Finally?

Nokia Announces Q4 2012 Profit

Nokia Announces Q4 2012 Profit – Source: BusinessWeek

Remember when we said that the fourth quarter of 2012 would be a make or break one for the Finnish company? Well the Q4 results for 2012 are out and it turns out that Nokia has made a tidy profit (after what seems like eons).

Profit in Q4 2012:

In the final three months of the year, Nokia turned in a profit of $585 million. A large part of the profits in Q4 2012 came from the Nokia Siemens Networks business which contributed $334 milion. Everything is not rosy though, the company lost nearly $3 billion in 2012 overall. However it is remarkable considering many wrote off Nokia as dead weight when it announced a loss of $1.2 billion more than a year ago in Q4 2011 and a loss of $754 million in Q3 2012.

Lumia Sales Are Up:

Sales for the Lumia series were up to 4.4 million units and Nokia also managed to sell 2.2 million Symbian handsets. While the sales of the Lumia might be up, the worrying figure for the company is the 74% drop in year-on-year mobile sales which is frankly staggering. Add to that the fact that the company still hasn’t cracked the American market and you have cause for concern. Sales in the US increased from 300k to 700k units which is not enough to make a dent to the likes of Apple and Samsung. m Nokia isn’t out of the woods just yet.

2013, A Clean Slate?

Despite the gloom despite turning a profit, year 2013 is all about a clean start for Nokia. It received $250 million from Microsoft (a result of the agreement in place between the two companies) and that has contributed to the net cash reserves increasing by $800 million to $5.8 billion.

Shareholders: No dividends for you!

The shareholders wont be pleased with the fact that the company has decided to forego dividends to the shareholders for the first time in 143 years. The seriousness of Nokia’s current predicament can be realized from the fact that Nokia gave out dividends during the World Wars as well as after the Soviet Union broke up (it was a major customer). The news, predictably, lowered the value of the stock.

However, it is viewed as a strong step by many analysts. The dividend omission “is a very important step because it shows management is conscious of the work that is ahead,” said Eric Beaudet, an analyst at Natixis Securities in Paris. “It’s clearly a strong signal to the market that says ’Don’t worry about our balance sheet, we’ll do what it takes.’”

Do you think Nokia has done enough to be relevant? Do you think they need another wave of great handsets like the Lumia 920 to regain a portion of what they have lost? Let us know in the comments below!

Source: BusinessWeek

  • Sean Godsell

    Nokia is tied to Microsoft. That is the real problem.