Nokia Q4 performance to be driven by strong Lumia sales

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Manufacturer expecting to surpass targets, with sales of its smartphone brand forecasted to grow by almost 50 per cent

Nokia has said in a preliminary financial statement that it has exceeded expectations and achieved underlying profitability in Q4 2012.

The manufacturer estimated that sales in its devices and services division will be €3.9 billion (£3.2 billion), up from €3.56 billion (£2.92 billion) in Q3, with device volumes of 86.3 million units, 12.7 million more than it shipped in the previous quarter.

Smartphone sales will be up to around €1.2 billion (£984 million) from €976 million (£800 million). Shipments will hit 6.6 million devices – 300,000 more than shipped in Q3. Shipments of Lumia devices will rise by 1.5 million to around 4.4 million units.

Feature phone sales will also rise, up from €2.37 billion (£1.94 billion) in Q3 to €2.5 billion (£2.05 billion) in the most recent three month period. Shipments will also increase three million to 79.9 million in Q4. Of this, 9.3 million will be Asha full touch smartphones.

Nokia added that operating margin for the fourth quarter is expected to be between breaking even and two per cent, which compares to the previous outlook of around minus six per cent.

The manufacturer said that several factors have impacted positively on its devices and services businesses to a greater extent than previously expected.

These include a better than predicted financial performance in its feature phones business and Lumia smartphones and lower than expected operating expenses, particularly due to greater than expected cost reductions under its restructuring program.

However, the company has provided a cautious outlook for Q1 2013, expecting seasonality and the competitive handset manufacturing sector to have a negative impact on profitability compared to Q4 2012.

Nokia president and CEO Stephen Elop (pictured) said: “We are pleased that Q4 2012 was a solid quarter where we exceeded expectations and delivered underlying profitability in Devices and Services and record underlying profitability in Nokia Siemans Networks.

“We focused our priorities and as a result we sold a total of 14 million Asha smartphones and Lumia smartphones while managing our costs effectively, and Nokia Siemans Networks delivered yet another very good quarter.”

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