Nokia gets Q4 boost from stronger Lumia sales
Nokia reported that improved sales of its Lumia Windows Phone smartphone range helped its mobile phone business achieve underlying profitability in the fourth quarter of 2012.
Click here for details on the Nokia Lumia 920.
According to Bloomberg, shares in the Finnish manufacturer surged by as much as 18 percent in Helsinki as the surprise announcement gave markets hope that CEO Stephen Elop's strategy is finally starting to pay off. This follows a drop in the share price earlier in the week following reports that Indian tax officials had raided Nokia's Chennai factory.
Nokia sold a total of 86.3 million devices in the fourth quarter, with its devices and services unit generating net sales of €3.9 billion. Smartphones accounted for 6.6 million units, of which 4.4 million were the Lumia handsets running Microsoft's Windows Phone software. This compares with 2.9 million Lumia sales in the third quarter of last year.
According to Reuters, the unexpected result was also helped by cost cuts, a stronger-than-expected performance from Nokia Siemens Networks and €50 million in patent royalties. Nokia will publish its official results on Jan. 24, but said its estimation of the fourth-quarter operating margin in the mobile phone business had improved to between break-even to 2 percent from previous forecasts of -6 percent.
"We're very pleased with the Lumia response," Elop told analysts, according to Reuters, although he noted that sales of the latest 920 models had been constrained by a shortage of supplies.
"This is clearly very positive news from Nokia as it both shows that the company's new Lumia product launches are performing well and that the NSN networks business has gained good momentum," Louis Landeman, an analyst at Danske Bank in Stockholm, told Bloomberg. "The company's restructuring programs are reducing costs faster than expected."
Nevertheless, the situation remains precarious for Nokia as it still has some way to go before proving that its focus on Windows-based smartphones will help change its fortunes on the smartphone market.
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