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Summary:

The Finnish firm’s preliminary results for the fourth quarter of last year show a surprise return to profitability for its Devices & Services division, partly thanks to unexpectedly high Lumia sales.

Man surprised at text message.

Nokia may not be in such steep decline as people have been thinking. The Finnish handset manufacturer has just outed preliminary financials for the last quarter of 2012 and updated its guidance for the first quarter of this year – and guess what, the company’s Devices & Services division is back in the black.

We’re not talking the glory days of old, but bear in mind that the third quarter of last year saw the division shed an unholy €683 million ($895 million). Before today’s preliminary results for the fourth quarter, analysts were warning that people shouldn’t get too hopeful about the Finnish firm returning to profitability anytime soon.

But then:

“Nokia now estimates that Devices & Services has exceeded expectations and achieved underlying profitability in the fourth quarter 2012.

- Mobile Phones business unit and Lumia portfolio delivered better than expected results; and
- Operating expenses were lower than expected.
- Devices & Services non-IFRS operating margin for the fourth quarter 2012 now expected to be between break even and positive 2 percent.”

Net sales within Devices & Services totalled €3.9 billion for the quarter. The biggest sellers were, unsurprisingly, the really low-end Series 40 phones, which sold 70.3 million units. However, the company also sold 15.9 million smartphones: 9.3 million Asha full-touch handsets, 2.2 million Symbian smartphones and a cool 4.4 million Windows Phone-based Lumia smartphones.

Better-than-expected sales of Lumias and low-end devices were only part of the picture, though – lower-than-expected operating expenses also helped.

Nokia Siemens Networks also beat expectations in the fourth quarter, achieving underlying profitability for the third consecutive quarter. That said, “seasonality and competitive environment” will likely weaken profitability in both divisions this quarter, Nokia noted.

Stephen Elop is delighted, as would I be if I were him. After all, this was a man whose decision to bail on the ‘burning platform’ that is Symbian led some embittered ex-Nokians to brand him the “world’s worst CEO”.

“We are pleased that Q4 2012 was a solid quarter where we exceeded expectations and delivered underlying profitability in Devices & Services and record underlying profitability in Nokia Siemens Networks,” he said in a statement. “We focused on our priorities and as a result we sold a total of 14 million Asha smartphones and Lumia smartphones while managing our costs efficiently, and Nokia Siemens Networks delivered yet another very good quarter.”

Finalized results will come out later this month, but the preliminaries have already sent up Nokia’s share price a whopping 16 percent on the Frankfurt stock exchange.

Of course, it’s too early to call this a full turnaround, but it’s certainly a slap in the face for those predicting Nokia’s imminent demise.

  1. Reblogged this on pazikas.com and commented:
    Remember the days that Nokia was the phone to have, I am still pretty young but my first phone was a 3210. I long for the days where Nokia is back on top there hardware back in the day was un-paralleled if they got back to there best I only see Samsung being able to contend.

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  2. Reblogged this on Bill's Blog and commented:
    Nokia – Company health different than I thought …

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  3. Haha, way to go Nokia..

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  4. Stephen Elop was and is still a trojan horse in Nokia from Microsoft. He ruined Nokians trust by ditching Symbian. I hate him frm the bottom of my heart.

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  5. Nothing in your post says profitability, they’re still losing money but just not as much money as they were expecting. I remember something similar being said this time last year after the launch of WP7. We won’t know if Nokia is going to do well until 2 more quarters in my opinion.

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  6. Innovation will put Nokia back at the top.

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  7. How about this: “However, the company also sold 15.9 million smartphones: 9.3 million Asha full-touch handsets, 2.2 million Symbian smartphones and a cool 4.4 million Windows Phone-based Lumia smartphones.”

    Asha Full touch (S40) counted in as Smart Phone – and it outsold WP…

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  8. Low cost smartphones outsell high cost smartphones when comparing amount of units sold? Breaking news I’d say! (If volumes are the method on comparing platforms, Series40 is the best mobile platform out there.)

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  9. Nice to see Nokia doing well, back in the late 90s right up till about 2009 I had nothing but Nokia’s my fave was the 6630 the first 3G phone, we have to thank Nokia for laying down the foundations for what we have to day, the young people that used Nokia’s back in the day like my self are now old gits that most likely see Phones as just a phone but our generation is not enough to keep Nokia in pocket, it’s the young that nokia need to cater for with their twitter facebook lives and god knows what, once Nokia tap into their there world then they will be top again, I must admit after using Sony phones since 2009 I’m a little reluctant to go back to nokia because I find Sony phones especially the xperia range a lot more devoloper friendly because of Andriod. Windows phones are not enough to temped me yet, I wish Nokia would shakes hands with Google and release some Andriod devices.

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