Nokia, which was more than $1 billion in the red at this time last year is now boasting a $269 million profit and an 11 percent rise in net sales in its fourth quarter report for 2012.
The Finnish firm’s profit — aided by cutting 20,000 jobs — was mustered despite declining revenue that dipped from $13.32 billion in the fourth quarter of 2011 to $10.66 billion last quarter, the report revealed.
Nokia garnered $40.24 billion in sales, a 22 percent decrease from the $51.56 billion it generated in 2011. The company’s 2012 operating profit was down to a $3.06 billion loss — in 2011 it had a $1.47 billion loss.
Nokia’s devices division was bolstered by strong holiday sales of its Smartphones — 6.6 million devices. The firm moved a total of 15.9 million devices in the fourth quarter: 9.3 million Asha devices, 4.4 million Lumia handsets and 2.2 million Symbian devices. Although the firm sold 20 million Smartphones in the same quarter the previous year, the average sale price of its handsets has increased with the improvement in the devices.
“We are very encouraged that our team’s execution against our business strategy has started to translate into financial results,” said CEO Stephen Elop in a statement. “Most notably we are pleased that Nokia Group reached underlying operating profitability in the fourth quarter and for the full year 2012.
“While the first half of 2012 was difficult for Nokia Group, in Q4 2012 we strengthened our financial position, improved our underlying operating margin in Devices & Services, introduced the HERE brand to expand our mapping and location experiences, and drove record profitability in Nokia Siemens Networks,” he added. “We remain focused on moving through our transition, which includes continuing to improve our product competitiveness, accelerate the way we operate and manage our costs effectively. All of these efforts are aimed at improving our financial performance and delivering more value to our shareholders.”
Nokia received a lift from its network equipment business, Nokia Siemens Networks. Rigorous cost reductions and a surge in sales translated into the firm’s highest operating margin since it was created six years ago.
The company reported a increase in net cash, which was up 22 percent on last quarter to $5.86 billion — money that the firm sorely needed after eating up a substantial sum to pay for its transition over the last year-and-a-half. One such change was ditching its in-house phone software, Symbian, and switching to Microsoft’s Windows platform.
In an added bid to save more money, Nokia has cancelled the 2012 dividend. The company paid $0.27 per share in 2011.