Nokia makes profit in Q4 but still lost €2.3bn in 2012

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Manufacturer made a fourth quarter profit of €439 million, but still posted a heavy loss over the course of last year

Nokia finished 2012 by returning to profit following months of losses, with Lumia smartphone sales rising by more than 50 per cent from the previous quarter.

In its fourth quarter financial results, Nokia reported an operating profit of €439 million (£369.9 million). This compares to the losses of €576 million (£485.3 million) and €954 million (£803.7 million) made in Q3 and Q4 2011 respectively.

Sales were €8 billion (£6.7 million), up 11 per cent sequentially but down 20 per cent year-on-year. Net cash stood at €563 million (£474.3 million), up around €800 million (£673.9 million) from the previous quarter but down 11 per cent from the same three month period a year ago.

Within its devices and services division, Nokia generated sales of €3.85 billion (£3.24 billion), down 36 year-on-year but up eight per cent sequentially. Smartphone sales rose 26 per cent from the previous quarter to €1.23 billion (£1.04 billion) but was down 55 per cent from Q4 2011. Feature phone sales rose 26 per cent sequentially but were down 19 per cent year-on-year to €2.47 billion (£2.08 billion).

Once again Europe provided Nokia with the biggest proportion of revenues, with sales hitting €1.2 billion (£1.01 billion), up 23 per cent from Q3 2012 but down 37 per cent from Q4 2011.

Nokia sold 86.3 million handsets in the period, up four per cent sequentially but down 19 per cent from a year earlier. Smartphone sales rose five per cent sequentially but were down 66 per cent year-on-year to 6.6 million units, while sales of mobile phones stood at 79.6 million units, up four per cent from the previous quarter but down 15 per cent from Q4 2011.

The manufacturer sold 4,4 million Lumia smatphones in the quarter, up from 2.9 million in Q3. In the quarter it released the Lumia 829 and 920, the first of its smartphones to run off the Windows Phone 8 OS. It also sold 9.3 million Asha full touch smartphones and 2.2 million Symbian devices.

Sales in Europe made up almost a quarter of Nokia’s overall sales. It sold 19.4 million units in this region, up 15 per cent sequentially but down 23 per cent year-on-year.

The average selling price (ASP) for its smartphones increased to €186 (£157), up from €155 (£131) in the previous quarter and €140 (£118) from a year ago. However, the ASP of its feature phones remained steady year-on-year at €31 (£26).

For 2012, Nokia’s loss more than doubled from the previous year to €2.3 billion (£1.94 billion). Within its devices and services business, it made a loss of €1.1 million (£927 million) compared to profit of €884 million (£745 million).

Overall sales decreased 22 per cent to €30.2 billion (£25.4 billion) with sales in its devices and services sector falling 34 per cent to €15.7 billion (£13.2 billion). Smartphone sales fell 50 per cent to €5.4 billion (£4.6 billion) while feature phone sales were down 21 per cent to €9.4 billion (£7.9 billion).

Europe accounted for 29 per cent of Nokia’s overall sales in the year, down 34 per cent to €4.6 billion (£3.9 billion). It shipped 335.6 million units last year, down 20 per cent from 2011, with European shipments down 23 per cent to 67.3 million units.

Nokia president and CEO Stephen Elop (pictured) said: “We are very encouraged that our team’s execution against our business strategy has started to translate into financial results. Most notably we are pleased that Nokia Group reached underlying operating profitability in the fourth quarter and for the full year 2012.

“While the first half of 2012 was difficult for Nokia Group, in Q4 2012 we strengthened our financial position, improved our underlying operating margin in Devices & Services, introduced the HERE brand to expand our mapping and location experiences, and drove record profitability in Nokia Siemens Networks.

“We remain focused on moving through our transition, which includes continuing to improve our product competitiveness, accelerate the way we operate and manage our costs effectively. All of these efforts are aimed at improving our financial performance and delivering more value to our shareholders.”

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