Nokia announces Q1 results

Nokia may have just gotten rid of it’s mobile phone division, but that doesn’t mean the company we love is going to disappear. Today Nokia announced it’s Q1 results and although it’s phone sales are slightly disappointing, there are positives to be taken out of it.

Overall device revenue dropped 30% year on year, from €2.77 billion ($3.84 billion) to €1.93 billion ($2.68 billion), and losses rose from €120 million ($166 million) to €326 ($452 million). Nokia blamed the lack of interest in it’s low end phones as the principle reason – citing a race to the bottom for cheap phones. It’s higher end phones (Lumia devices) didn’t fair too well either and although no specific figures were given, an estimate of 7.1M has been banded around – a 13% drop on Q4.

However now that Nokia no longer owns the devices and services division, how does it’s future centred around networks, maps and technologies look?

Although the first part of this post may sound quite gloomy, Nokia actually made an overall profit of €240 million ($332 million) for Q1 2014; without the phone business, that figure would’ve been over €500 million ($840 million). Both the networks (-17%) and mapping (-3%) divisions net sales decreased compared to Q4, but profits actually increased because of higher margins, most likely due to restructuring and streamlining in recent months. Technologies net sales and profits both increased slightly and Nokia believe this will increase massively due to Microsoft licensing deals.

Nokia also said it plans to spend about 5 billion euros ($6.9 billion) on dividends, share buybacks and debt reduction, leading to an increase in the share price earlier today.

So overall, with a strong chest of patents behind them and continuous investment in both networks and mapping, Nokia does have a future, but it most likely won’t include many consumer facing products anytime soon.

http://company.nokia.com/en/news/press-releases/2014/04/29/nokia-corporation-interim-report-for-q1-2014

Category: Aquisitions, Microsoft, Nokia