Nokia Q4 2012 Results: $585 Million Profit

| January 24, 2013 | 245 Replies

Screen Shot 2013-01-24 at 11.09.47Bit of a nice headline at TheVerge. After several quarters of losses, Nokia seems to have recorded a profit of $585 Million ($10.83 Billion Revenue). Good (small) steps in the right direction no? As noted by the Verge, that’s significantly better than the 700M+ loss last quarter or the 1.2B loss last year (as part of the restructuring efforts). Nokia’s net cash rises from $4.7 Billion to 5.8 Billion.

Most of the profit, coming from, oddly enough, NSN.

Here’s the PDF document:

http://www.results.nokia.com/results/Nokia_results2012Q4e.pdf

 

Fourth quarter 2012 highlights:
Nokia Group non-IFRS EPS in Q4 2012 was EUR 0.06; reported EPS was EUR 0.05.

  • - Nokia Group achieves underlying operating profitability, with Q4 non-IFRS operating margin of 7.9%.
  • - Nokia Group strengthened its net cash position by approximately EUR 800 million sequentially, of which
  • approximately EUR 650 million was generated by Nokia Siemens Networks.
  • - Devices & Services Q4 non-IFRS operating margin improved quarter-on-quarter to 1.3%, due to an increase in
  • gross margin as well as a decrease in operating expenses.
  • - Nokia Siemens Networks non-IFRS operating margin improved quarter-on-quarter and year-on-year to a
  • 14.4% in Q4, the highest level of underlying operating profitability since its formation in April 2007, primarily
  • due to an increase in gross margin.

Full year 2012 highlights:
Nokia Group full year 2012 non-IFRS EPS was EUR -0.17; reported EPS was EUR -0.84.

  • - Nokia Group achieves underlying operating profitability, with full year 2012 non-IFRS operating margin of
  • 0.4%.
  • - Nokia Group ends 2012 with a strong balance sheet and solid cash position. Gross cash was EUR 9.9 billion and
  • net cash was EUR 4.4 billion, after incurring cash outflows related to restructuring of approximately EUR 1.5
  • billion and dividend payment of approximately EUR 750 million.
  • - To ensure strategic flexibility, the Nokia Board of Directors will propose that no dividend payment will be made
  • for 2012 (EUR 0.20 per share for 2011). Nokia’s Q4 financial performance combined with this dividend proposal
  • further solidifies the company’s strong liquidity position.

79.6 Million mobile phones

6.6 Million Smart devices.

There’s an odd split here though…(total 86.3M devices this quarter)

9.3 Million Asha Smartphones

4.4 Million Lumia Smartphones

2.2 Million Symbian Smartphones.

 

Screen Shot 2013-01-24 at 11.27.32

The Nokia Outlook:

 

  • - Nokia expects its Devices & Services non-IFRS operating margin in the first quarter 2013 to be approximately negative 2 percent, plus or minus four percentage points. This outlook is based on Nokia’s expectations regarding  a number of factors, including:
      • - competitive industry dynamics continuing to negatively affect the Mobile Phones and Smart
      • Devices business units;
      • - the first quarter being a seasonally weak quarter;
      • - consumer demand, particularly for our Lumia and Asha smartphones;
      • - continued ramp up for our new Lumia smartphones;
      • - expected cost reductions under Devices & Services’ restructuring program; and
      • - the macroeconomic environment

Nokia continues to target to reduce its Devices & Services non-IFRS operating expenses to an annualized run rate
of approximately EUR 3.0 billion by the end of 2013.
- Nokia expects Location & Commerce non-IFRS operating margin in the first quarter 2013 to be negative due to
lower recognized revenue from internal sales, which carry higher gross margin, and to a lesser extent by a
negative mix shift within external sales.
- Nokia and Nokia Siemens Networks expect Nokia Siemens Networks non-IFRS operating margin in the first
quarter 2013 to be approximately positive 3 percent, plus or minus four percentage points. This outlook is based
on Nokia Siemens Networks’ expectations regarding a number of factors, including:

      • - competitive industry dynamics;
      • - the first quarter being a seasonally weak quarter;
      • - product and regional mix;
      • - expected continued improvement under Nokia Siemens Networks’ restructuring program; and
      • - the macroeconomic environment.

Nokia Siemens Networks now targets to reduce its non-IFRS annualized operating expenses and production overheads by more than EUR 1 billion by the end of 2013, compared to the end of 2011. Nokia Siemens Networks previous target was to reduce its non-IFRS annualized operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011.

Cheers Alvester for the heads up.

Category: Nokia

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  1. stylinred says:

    NON-IFRS who cares about Non-IFRS… that explains why the stock took a dive today

    • ms.nokia says:

      i believe the stock drop value will be equal to the anticipated dividend payment that was canceled.
      the stock is not worth the same value once its dividend was stopped.

      • Jiipee says:

        The main reasons for the drop what on the financial press have been given:
        – Channel stuffing ie 3-4 weeks stocks in sales channel
        – suprise in the timing of minimum royalty payments
        – bad sales results in China and US in comparison to the investment
        – component shortage continues

        I dont think that major investors were expecting dividends. Nokia just raised expensive loans and it would have been foolish to pay the loans out as dividend.

    • Janne says:

      stylinred:

      Wrong. The headline is IFRS profit.

      Nokia’s IFRS profit for Q4/2012 was 439 million euros = $585 million.

      Nokia’s non-IFRS profit was much higher than that: 635 million = $810 million.

      (Besides, non-IFRS profit is actually very telling of actual business success. IFRS includes so many accounting valuations that it rarely tells of real monetary losses or gains.)

      • nn says:

        Pardon me, but this is ridiculous. In fact IFRS results are the real monetary loses or gains, which is why Nokia is required to compute them. Sure, they are not perfect, mainly because single number in one point of time can’t capture the complexity of big company.

        But things like marking big write-off in one quarter while the loss happened gradually over many previous quarters are still real values and money lost. If you think Nokia can incur IFRS loses indefinitely and be happy with the “underlining profitability”, you are very mistaken.

        • Janne says:

          I am not mistaken. There is a real reason why in Finland non-IFRS numbers are preferred.

          • nn says:

            OK, so the view that they can permanently run IFRS loses is not mistaken. Good.

            At least that explains why you think they are secured and can happily continue on the WP path into foreseeable future.

            • correct says:

              Listen moron, do you not get that they posted an IFRS profit for Q4 AS WELL AS non-IFRS? Who cares about your troll argument? They posted a nice profit for Q4 and cash on hand went up by a nice amount. Period.

  2. correct says:

    Screw you haters, scrrewwww yoouuu!

    Nokia made a REAL profit for Q4. Net cash is UP, and most importantly, ASP for smartphones is HIGHER than it has been for yours! Smartphones ASP is close to 200, that is incredible!

    Keep making all the excuses you want haters, while and millions of others real Nokia fans will keep enjoying the best phones in the business.

    • correct says:

      *years

    • stylinred says:

      non-ifrs doesn’t mean anything

      • Janne says:

        Except Nokia made IFRS profit also. The Verge number is IFRS. Non-IFRS is much higher.

        And ASP is up a lot, when everyone (including many vocal critics here) thought it would be down.

        • Jiipee says:

          Lumia asp was a positive surprise, I have to admit. Would be interesting to see the mix. Also Symbian was high. Some sources claim that margins were down. Need to confirm that. Nokia may have lost a lot of bargaining power, which can also be seen in supply shortages.

          • correct says:

            Are you for real? MARGINS were down? For what, Asha and feature phones? Absolutely NO WAY margins were down for smartphones, not with an ASP of close to 200.

          • Noki says:

            how can it be surprise, last quarter it only had the old noncompetitive wp7 Lumia range that was only selling on discount, this quarter they have the new competitive hardware (l920 is a solid piece of hardware) with wp8 and fresh price tag… the ASP could only go up.
            problem is that it did not sold much only pathetic 4.4 and Q1 will not be much better I suppose

            • Janne says:

              Everyone and their Elop-hating mother knew ASP was going down here because of the WP7 Lumia firesales. The usual posters here said so. It was possible too, of course, it’s just that when people make certainties out of these things prematurely to support their point of view those predictions become problematic.

              • Marc Aurel says:

                The WP7 firesales started already in Q3, so their effect was divided between Q3 and Q4. Lumia 510 sales also did not really start until well into December, which also helped the ASP. Low end Symbian devices such as the C5-00 and C5-05/06 were also finally gone and a significant part of Symbian sales were probably 808s, further boosting ASP.

                Still, I have to say that I was somewhat surprised to see smartphone ASP improve so much. I expected the WP7 firesale and WP8 sales to about cancel each other out.

        • correct says:

          Exactly. Eat it haters. All the Symbian and Meego trolls who were so proud of Nokia ASP being in the 160-170 range during Symbian peak days, eat it. The ASP for Lumias is WAY higher than Symbian ever had, haters here have been silenced.

          • akse says:

            Back then Nokia had like 5-15 Symbian models ranging from 100e-600e. They also sold over 25M in each Quater where most of the phones were the cheap 100e-250e models.. so yeah of course it brings down the ASP.

            • correct says:

              And now Nokia also has Asha full touch models being counted as smartphones too, which brings ASP down.

              • jiipee says:

                Nohoo, they are counted as mobile phones according to the report. They even mention Swipe UI under mobile phones unit.

                • ULTIMATEANTITROLL says:

                  Then Nokia went back against their word, and reclassified them. Nokia specifically mentioned recently that Asha full touch models were considered to be “smartphones”.

                  This is strange to me that Nokia didn’t classify them smartphones in Q4 results. As Ashas continue to get more capable, at what point then will Ashas be considered smartphones and not simply mobile phones?

                  Ashas are a lot more capable than low end Blackberries for example, yet they are classed as mobile phones by Nokia, yet Blackberry classes their low end models as smartphones.

        • Marc Aurel says:

          The ASP picture is not that simple. Smart devices ASP QoQ is indeed up remarkably, but all devices ASP YoY is still down. That is because the Lumia unit sales are so low — they can’t even make up for the midrange and low end Symbian sales in Q4 2011 when it comes to all devices ASP.

      • correct says:

        You’re an idiot. Nokia made PURE Profit, IFRS, non-IFRS it doesn’t matter. It’s REAL profit after ALL expenses are accounted for.

  3. Jorge Arturo says:

    I don’t know, it seems fake, somehow, I know the numbers are real, but how much of that money actually came from selling phones, after all they recieve MS money, they sold their HQ, close offices and fire people, theyare selling more S40 and S30 phones than smartphones (by much more than before) so it is hard to see it as a good news.

  4. Berto says:

    But still, Nokia is going down, its inevitable

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