Nokia provided a tentative sign yesterday that its smartphone partnership with Microsoft and deep restructuring efforts were paying off, as it reported a positive underlying profit margin in its core mobile business for the first time in a year.
Pre-releasing some of its fourth-quarter results two weeks early, the struggling Finnish mobile phone manufacturer said it had shipped 4.4 million of its flagship Lumia smartphones in the three months to December, up from 2.9 million in the previous quarter.
Underlying margins, under Nokia’s preferred non-IFRS accounting standards, at its mobile phone unit should be between 0 and 2 per cent, while those at its telecoms equipment joint venture, Nokia Siemens Networks, should reach a record 13-15 per cent.
Nokia is still far from out of trouble after largely missing the smartphone trend, allowing Apple’s iPhone and devices running on Google’s Android platform to dominate.
It warned that the first quarter of 2013 would be weaker than the last of 2012 due to fierce competition and the fact that the run-up to Christmas is typically the strongest part of the year. Margins at its mobile unit would be -2 per cent, plus or minus four percentage points. But analysts said they would have to upgrade their profit forecasts for 2013, and Nokia’s shares rose 10.8 per cent to €3.32 on the early results.– Copyright 2013 The Financial Times Limited
