Nokia hasn't had much good news to report lately, but Thursday proved to be an exception. As the company drew up its quarterly results, it found that it surpassed sales expectations for the fourth quarter of 2012.
A big reason for this boost is Nokia's line-up of Windows-based Lumia smartphones, which sold 4.4 million units compared to quarter three's 2.9 million sales. That is a sharp increase that bodes well for the future. The budget-priced Asha series of phones also did well, selling 9.3 million units. As a result of better-than-expected sales (as well as lower-than-predicted operating expenses), Nokia is expecting an operating margin that at least breaks even and could even slide in at a positive two percent. That's a lot better than the minus six percent the company originally anticipated.
"We are pleased that Q4 2012 was a solid quarter where we exceeded expectations and delivered underlying profitability in Devices & Services and record underlying profitability in Nokia Siemens Network," said Nokia CEO Stephen Elop in a press release. "We focused on our priorities and as a result we sold a total of 14 million Asha smartphones and Lumia smartphones while managing our costs efficiently, and Nokia Siemens Networks delivered yet another very good quarter."
The good news for the Lumia portfolio comes on the heels of reports that Elop is keeping the company open to considering an Android-based phone in the future. Before Thursday's sales report, Nokia's Windows-based phones were causing the company to bring in consecutive quarters of losses.
Still, the company's good fortune came with a hint of not-so-stellar predictions for the new year, as Nokia doesn't expect these positive sales to extend into the first quarter of 2013. It's predicting an operating margin of minus two percent, give or take four percentage points. The reasons for the decline include:
- Competitive industry dynamics continuing to negatively affect the smart devices and mobile phones business units;
- The first quarter being a seasonally weak quarter;
- Consumer demand, particularly for our Lumia and Asha smartphones;
- Continued ramp up for our new Lumia smartphones;
- Expected cost reductions under Devices & Services' restructuring program; and
- The macroeconomic environment.
