Friday, December 2, 2022

Nokia Posts a Profit

Finnish smartphone maker Nokia is showing signs of life again. The company posted a profit for the first time in eighteen months. However, the company’s share price fell after it announced it would forgo paying a dividend for the first time in more than 100 years.

The Guardian’s Juliette Garside reported, “Nokia has returned to profit, ending an 18-month spell during which it piled up losses of more than €4bn (£3.36bn), but scrapped its dividend for the first time in more than a century in order to conserve cash. The Finnish mobile phone maker reported an operating profit of €439m, compared with a loss of nearly €1bn a year ago, as consumer demand for its smartphones revived and the decision to slash its workforce by 20,000 helped to cut costs. The company has returned to growth, with net sales up 11% on the previous quarter to €8bn.”

ZDNet’s Ben Woods added, “Nokia’s full-year revenue fell 22 percent year on year to just over €30bn, down from €38.6bn in 2011, according to the results, which were published on Thursday. The company cited ‘competitive industry dynamics’ as a continuing issue for its future outlook. However, despite the drop in revenue, Nokia reported 4.4 million Lumia handsets sold during the last three months of 2012.”

Bloomberg’s Adam Ewing and Kasper Viita noted, “Nokia Oyj will skip a dividend for the first time in at least 143 years as the struggling Finnish mobile-phone maker retains cash for its comeback attempt. The company announced the decision as it reported a seventh straight drop in quarterly revenue and U.S. phone sales trailing estimates, sending its stock lower. Even the World Wars and the breakup of the Soviet Union, a major buyer of Nokia’s networking gear, didn’t stop the former maker of rubber boots and toilet paper from returning cash to investors.”

Kevin J. O’Brien with The New York Times observed, “The company’s shares fell as much as 8.4 percent in afternoon trading in Helsinki… Mats Nystrom, an analyst at SEB Enskilda Bank in Stockholm, said that Nokia had raised investor hopes earlier this month when it said it would report a quarterly profit, but that the company had not met those expectations with results that showed less-than-expected growth in the average selling prices of its flagship Lumia smartphone line and falling cellphone prices. ‘I still think it is far from a certainty that this turnaround will be a success,’ Mr. Nystrom said.”

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