Nokia's Q4 performance exceeds expectations

Preliminary estimates by Nokia indicate that the Finnish phone giant's Q4 2012 financial performance has exceeded expectations in their Devices & Services division, thanks in large part to the success of their Lumia line of Windows Phone devices. Their estimates suggest that Nokia achieved what it calls "underlying profitability" in Q4. In a press release, CEO Steven Elop shared his thoughts on the news:

"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. 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."

According to the report, three primary factors contributed Nokia's successful fourth quarter:

  • 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.

It is estimated that Nokia totaled EUR 3.9 billion in the last three months of 2012 from sales of 86.3 million units. Of the 6.6 million smart devices sold, 4.4 million of those were Nokia Lumia devices powered by Windows Phone. This news jump started Nokia's stock, which shot up about 17% at the time of this story.

Nokia's Q4 estimates are a much needed boon to the company, who experienced mass layoffs and saw its stock plummet and credit rating downgraded since moving to the Windows Phone platform. However, they have been sure to temper expectations for the first quarter of 2013. They project that "seasonality and competitive environment" will lead to a dropoff from the end of 2012 to the start of 2013.

We shall see what the new year has in store for Nokia.

Source: Nokia

Seth Brodeur