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Nokia releases mixed final results before Microsoft sale

Finland's biggest tech company has issued its third-quarter results, the last such statement before the buyout of its trademark handset division. It shows a small operating profit but lower sales, with little improvement on the average per-unit retail price. Analysts are studying the results for clues to how the new post-phone Nokia will invest the cash from the deal.

Nokian pääkonttori
Nokia has already sold its headquarters in Espoo, staying on as a tenant. Image: Yle

Nokia has released its final batch of quarterly results before finalising the sale of its mobile devices unit. They suggest the company managed to make a small operating profit between July and September. Operating profits were 118 million euros on net sales of 5.66 billion, which fell short of most analysts' expectations. A year ago at this time the firm posted losses of 564 million euros on sales of 7.23 billion.

Closer scrutiny of the results reveals a net loss of 91 million euros with a revenue plunge of more than 20 percent.

Sales and profits for Nokia's networks business were lower than expected. NSN will become the backbone of the company following next spring's expected acquisition of the handset unit. In the first nine months of the year, its profits declined by nine percent. Turnover dipped from 183 to 166 million euros.

The report says the Nokia Group had underlying operating profitability for the fifth consecutive quarter, with a third-quarter operating margin of 3.8 percent. The company credits this to "strong performances" by Nokia Solutions and Networks (NSN) and the mapping and location unit HERE.

The firm gave a negative outlook for the devices and services operations that it is selling to Microsoft next year. Nokia said it expects a positive operating margin of 12 percent at its solutions and networks unit.

Lumia sales up

Sales of its flagship Lumia phones were 8.8 million units, ahead of analysts' predictions of between 8 and 8.5. That a rise of nearly one fifth over the previous quarter's 7.4 million, led by the budget-priced Lumia 520. Sales in the crucial North American market also rose impressively, with 1.4 million shipped during Q3. However the worldwide numbers remain tiny compared to those for Apple and Android phones.

Overall Nokia sold some 65 million phones, down from nearly 83 million a year earlier. The average price per unit remained about the same, 45 euros compared to 43 euros in the third quarter of 2012.

Nokia's share price rose by around six percent in Helsinki soon after the results were released at 1 pm. An hour later that had slowed to around five percent. The volume of shares traded was much lower than in past years.

Prior to the announcement, Nokia's stock price was down by 1.3 percent from Monday at 4.93 euros. The share has gained some 80 percent in value since the Microsoft pact was unveiled in early September.

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