[h=1]Nokia returns to profit, but sales drop![/h]10:08a.m. EST January 24, 2013
People walk past an advertisement for the Nokia Lumia 900 phone, which runs on a Windows platform, in the window of an AT&T store on April 9, 2012 in New York City. (Photo: Spencer Platt, Getty Images)
[h=3]Story Highlights[/h]
- Company earns net profit of $270 million
- Nokia struggling to compete in smartphone market
- Nokia sold 15.9 million smartphones in quarter, compared to 48 million iPhones
HELSINKI (AP) -- Struggling Nokia turned a net profit of $270 million in the fourth quarter, compared with a loss of $1 billion a year earlier, but revenue fell 20% as it failed to make gains in the fiercely competitive smartphone market.
The Finnish company said Thursday that revenue dropped to $10.6 billion from as smartphone sales plunged 55%, and it gave a grim outlook, saying it would not pay a dividend for 2012 to save money.
The company's shares plunged more than 4% in Helsinki.
Nokia expects operating margins in the first quarter to be "approximately negative 2%, plus or minus four percentage points," citing increased competition and lower-than-expected demand for its flagship Lumia phones and cheaper Asha models, which have been popular in emerging markets.
Nokia said it
sold 15.9 million smartphones in the quarter, down from 19.6 million a year earlier, including 4.4 million Lumia phones. In comparison, rival Apple sold almost 48 million iPhones.
Neil Mawston, a technology expert from Strategy Analytics in Boston,
said Nokia's share of the global smartphone market had fallen to a record low of about 3 percent.
"Nokia is on a recovery curve at the moment," Mawston said. "In terms of volumes, they really need to improve. They regained profit, the next step is to regain market share."
The company sold only 4.6 million handsets in China, a fall of 69 percent from the previous year, with sales revenue there plunging 79% from the previous quarter.
"That's a whopping decline in the world's biggest phone market and smartphone market. China really was the one that jumped out the most in the report," Mawston said. "North American recovery was also less than expected."
Nokia, formerly the world's top cellphone maker, had hoped to stem the decline in smartphones through a partnership with Microsoft Corp.
but North America - the frontline of the smartphone market - continued to be a disappointment. Shipments there grew 40 percent on the year, but to a mere 700,000 million devices.
In all, Nokia sold 45 million cellphones in the fourth quarter, 15 percent less than in 2011.