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Nokia returns to profitability

Nokia Corporation (NOK) reported its first quarterly profit in over a year today, earning $270 million on revenue of $10.7 billion. The numbers were better than Wall Street had expected, and reflect Nokia’s deep cost cuts combined with strong sales of entry-level phones in developing markets and a healthy contribution to earnings from Nokia Siemens Networks.

The Finnish company that once dominated the mobile phone market has struggled to gain a foothold in the high-end smartphone space, and today the company said that it continues to face challenges there. Nokia said that it expects an operating margin of negative 2% in its devices and services unit during the first quarter of 2013. It blamed the expected loss on “competitive industry dynamics, continued ramp-up of our new Lumia smartphones, and the macroeconomic environment,” among other factors. Nokia sold 4.4 million Lumia phones in the fourth quarter.

For the full year, Nokia Group reported revenue of $40.3 billion and an operating loss of $2.3 billion. That compares to 2011 revenue of $50.7 billion and an operating loss of $1.4 billion, based on Thursday’s exchange rate.

Nokia’s 2012 cost cuts eliminated roughly 10,000 jobs worldwide, or 20% of the company’s workforce. Nokia is completing those job cuts this quarter.

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ABOUT AUTHOR

Martha DeGrasse
Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.

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