Finnish company Nokia (NYSE:NOK) has returned to profit in the fourth quarter of 2012, but will not pay the annual dividends for the first time in more than 140 years because of declining sales. The first quarterly profit in the last 18 months recorded by Nokia was due to good results from the mobile phone division. Nokia has paid dividends last year of €750 million, but this year it will not do it to gain “strategic flexibility.”
During October-December 2012, Nokia posted a net profit of €202 million ($270 million), compared with a net loss of over one billion dollars in the same period of 2011. The revenue fell in the last three months of 2012 by 20% to $8 billion.
At the stock exchange in Helsinki, Nokia shares rose 18% Thursday morning reaching €3.64, but closed at €3.296. Nokia stock was down by 7.7% in the middle of the trading session on NYSE.
Nokia’s mobile division recently reported a better than expected profit in the fourth quarter of 2012, thanks to strong sales of its top model Lumia, demand recovery and lower costs. Sales success of the latest models Lumia 920 and 820 is crucial for Nokia, which is trying to regain market share lost to rivals Samsung and Apple. Operating profit from mobile division was 2% of sales, after Nokia previously estimated a loss of 10% of sales.
Net sales of phones and services in the fourth quarter were approximately €3.9 billion ($5.09 billion). The company sold 86.3 million phones in total, of which 6.6 million were smartphones. During October-December 2012, Nokia sold 4.4 million Lumia models, compared to 2.9 million in the third quarter. Also it sold 9.3 million Asha models, low-cost phones with touch screens.
Top models Nokia Lumia 920 and Nokia Lumia 820 use the latest version of Windows Phone, as Microsoft hopes to regain market share and persuade more companies to use Windows Phone 8 operating system.
Nokia recently announced that it is maintaining its target to reduce costs by over one billion euros by the end of 2013. Last year, Stephen Elop, Nokia CEO of the Finnish company presented a plan which provides for the elimination of 3,500 jobs.
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