Nokia back in profit despite sales drop

on 24/01/2013 12:17:36

Mobile phone maker Nokia has reported a fourth-quarter net profit of €202m compared to a net loss of more than €1bn a year earlier.

Revenue in the period fell 20% to €8bn from a year earlier, however.

The ailing Finnish company gave a poor outlook saying it expects operating margins in the first quarter 2013 to be "approximately negative 2%, plus or minus four percentage points," citing increased competition as it struggles against the dominance of market leaders Samsung and Apple's iPhone.

Nokia said it sold 15.9 million smartphones in the quarter, down from 19.6 million a year earlier.

The company's share price was up some 3% at €3.62 in Helsinki.

Nokia said it would not pay a dividend for 2012 to save money.

Later the company's shares plunged more than 4% to €.33 in Helsinki.

Neil Mawston, a technology expert from Strategy Analytics in Boston, said Nokia's share of the global smartphone market had fallen to a record low of about 3%.

"Nokia is on a recovery curve at the moment," Mr Mawston said. "In terms of volumes, they really need to improve. They regained profit, the next step is to regain market share."

The company sold only 4.6 million handsets in China, a fall of 69% from the previous year, with sales revenue there plunging 79% to €213m from the previous quarter.

In all, Nokia sold 45 million mobiles in the fourth quarter, 15% less than in 2011.

CEO Stephen Elop said he was encouraged that the company had reached "underlying profitability" and strengthened its financial position but cautioned that more cutbacks could be expected.

"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," Mr Elop said.