Nokia reported stronger-than-expected results for the fourth quarter with gains in both global and smartphone market share. The company regained some of the swagger it lost following a dismal third quarter.
And Wall Street rejoiced; Nokia's stock was up almost 8 percent on the news to around $13.90 per share following the news.
The company reported a net profit of $1.33 billion in the quarter, a 65 percent jump from its $804 million in the year-ago period and a dramatic reversal from the $834 million loss the company posted in the third quarter. The Finnish firm scored net sales of $16.74 billion in the quarter, down 5 percent year-over-year but up 22 percent sequentially. Net sales in the firm's devices and services business totaled $11.4 billion, up slightly year-over-year and up 18 percent from the third quarter.
In the quarter, Nokia shipped 126.9 million units, up 12 percent from the year-ago quarter and up 17 percent sequentially. Nokia's global handset market share inched up to 39 percent, from 37 percent in the fourth quarter of 2008 and 38 percent from the third quarter, according to the company's measurements. Nokia's devices and services segment posted an operating margin of 14.9 percent, up from the 9.4 percent it recorded in the year-ago period.
Importantly, Nokia's global smartphone market share shot up to 40 percent, charging back after it dropped to 35 percent in the third quarter. The company shipped 20.8 million smartphone units in the fourth quarter of 2009, up from 15.1 million in the fourth quarter of 2008 and 16.4 million units in the third quarter.
"We grew our market share in smartphones in the fourth quarter, driven by the successful launch of new touch and Qwerty models," Nokia CEO Olli-Pekka Kallasvuo said in a statement. "Our performance in smartphones, combined with continuing success in the emerging markets, helped us increase sales in our devices and services unit, both quarter-on-quarter and year-on-year. Our solid results also owe a good deal to world class supply chain management and impressive sales execution."
As for Nokia's outlook on the overall global handset industry, the firm reiterated expectations of 10 percent growth this year over last year, though it said it expects its share of that market to remain flat.
Analysts were impressed with the company's performance, particularly its smartphone gains.
"The fact that Nokia's market share in the smartphone market grew to 40 percent from 35 percent is quite impressive and highly unexpected, especially given the increased level of competition from companies like LG, Samsung, Apple, Palm, RIM and HTC," said Julien Blin of JBB Research. "That said, while Nokia is not out of the woods yet, Nokia's strategy seems to be paying off; Nokia recently reorganized its U.S. operations to work more closely with the leading U.S. carriers, made key management changes, and is changing its strategy toward the U.S market as it now intends to make specific devices for U.S."
As for Nokia Siemens Networks, the firm's joint venture with Germany's Siemens, the business saw a 16 percent decline in sales to $5.36 billion, from $6.4 billion in the year-ago period, due to increased competition from the likes of Ericsson and Chinese vendors Huawei and ZTE. However, Nokia Siemens broke a string of quarterly losses with its $25.3 million operating profit.
- see this Nokia release
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Q4 earnings page
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