You’d better sit down for this: Nokia is actually doing reasonably well

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.


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