comscore Nokia Q4 2011 results out, sells over a million Lumia smartphones
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Nokia Q4 2011 results out, sells over a million Lumia smartphones

Nokia’s Q4 results for 2011 are out and by the looks of it things are slowly turning around for the Finnish mobility giant. The report states that the company has already sold over a million Lumia s

Nokia’s Q4 results for 2011 are out and by the looks of it things are slowly turning around for the Finnish mobility giant. The report states that the company has already sold over a million Lumia smartphones ever since their October launch and the company expects this trend to continue with its upcoming Lumia 900 aimed at the US market. Apart from this the company reported strong sales in the feature phone segment with the company hitting 93.9 million sales which is 5% higher than the last quarter. The bigger story was the upswing in the sale of smartphones where the company sold 19.6 million devices a 17% jump from the previous quarter.  On the whole the company’s net sales hit the Euro 10 Billion mark, however inspite of all the improvements the company posted a loss of $1.4 billion with smartphone sales being down by 31%. In the meanwhile hit the break and check out the press release. Also Read - Former Nokia boss Stephen Elop among 4 senior executives leaving Microsoft in a major organizational shakeup

Also Read - Microsoft announces rebranding of Nokia apps, shuts down Nokia's memory website

STEPHEN ELOP, NOKIA CEO: Also Read - Here's Stephen Elop's memo to Nokia employees on new device strategy under Microsoft

The fourth quarter of 2011 marked a significant step in Nokia’s transformation. Most notably, in Q4 we introduced new mobile phones and smartphones, which resulted from the strategy shift in our Devices & Services business.

Overall, we are pleased with the performance of our mobile phones business, which benefited in Q4 from sequential double-digit percentage growth in our dual SIM business, with particular strength in India, Middle East and Africa and South East Asia. In October, we introduced the Asha 200, 201, 300 and 303, which brought new mobile phones into 76 markets around the world.  We are building on this foundation with R&D investments as we continue our journey to connect the next billion to the Internet.

Also in October, just six months after signing an agreement with Microsoft, we introduced our first two devices based on the Windows Phones platform – the Nokia Lumia 800 and the Nokia Lumia 710. We brought the new devices to market ahead of schedule, demonstrating that we are changing the clock speed of Nokia. To date, we have introduced Lumia to consumers in Europe, Hong Kong, India, Russia, Singapore, South Korea and Taiwan.

We have also started our important re-entry into the North American market. Earlier this month, T-Mobile started selling the Nokia Lumia 710 as a lead device. We also announced the new Nokia Lumia 900 with AT&T, and immediately received a number of industry awards. The Nokia Lumia 900 is our third Lumia device, our first LTE device designed specifically for the North American market, and AT&T is positioning the Lumia 900 as a lead LTE device.

In the war of ecosystems, clearly there are some strong contenders already on the field. And with Lumia, we have demonstrated that we belong on the field.  Our specific intent has been to establish a beachhead in this war of ecosystems, and country by country that is what we are now accomplishing. To date we have sold well over 1 million Lumia devices. From this beachhead of more than 1 million Lumia devices, you will see us push forward with the sales, marketing and successive product introductions necessary to be successful.  We also plan to bring the Lumia series to additional markets including China and Latin America in the first half of 2012.

And, while we progressed in the right direction in 2011, we still have a tremendous amount to accomplish in 2012, and thus, it is my assessment that we are in the heart of our transition.

Specifically, changing market conditions are putting increased pressure on Symbian. In certain markets, there has been an acceleration of the anticipated trend towards lower-priced smartphones with specifications that are different from Symbian’s traditional strengths. As a result of the changing market conditions, combined with our increased focus on Lumia, we now believe that we will sell fewer Symbian devices than we previously anticipated.

During Q4, we also formed the Location & Commerce business to drive value from our leading mapping and location-based services platform. We conducted annual impairment testing in Q4 in the context of our new structure and plans for the future, and valued the Location & Commerce business at EUR 4.1 billion, resulting in an impairment of goodwill of EUR 1.1 billion. The Location & Commerce business is an important asset that is bringing differentiating location-based services to Nokia, the Windows Phone ecosystem, and other Microsoft products such as Bing. We believe this is the leading location-based services platform with an opportunity to become tremendously powerful as computing goes more mobile, and location increasingly becomes a critical organizing dimension for a person’s experiences.

In summary, with a strong balance sheet, our performance in mobile phones and the new excitement around Lumia, we are confident that we are on the right track to build long-term value.

NOKIA OUTLOOK

– Nokia expects its non-IFRS Devices & Services operating margin in the first quarter 2012 to be around breakeven, ranging either above or below by approximately 2 percentage points. This outlook is based on our expectations regarding a number of factors, including:

– competitive industry dynamics, particularly impacting our Smart Devices business unit;
– a greater-than-normal seasonal decline in Devices & Services net sales;
– timing, ramp-up, and consumer demand related to our new products;
– the macroeconomic environment.

– Nokia continues to target to reduce Devices & Services non-IFRS operating expenses by more than EUR 1 billion for the full year 2013, compared to the recasted full year 2010 Devices & Services non-IFRS operating expenses of EUR 5.35 billion.
– Nokia and Nokia Siemens Networks expect Nokia Siemens Networks non-IFRS operating margin to be negative in the earlier part of 2012. In the first quarter of 2012, Nokia Siemens Networks expects substantial charges related to its previously announced global restructuring program aimed at maintaining long-term competitiveness and improving profitability. Due to the nature of the restructuring program as well as prevailing uncertain macroeconomic conditions, the timing of improvements in profitability is uncertain and therefore Nokia Siemens Networks’ non-IFRS operating margin in 2012 is expected to be volatile. Thus, Nokia and Nokia Siemens Networks do not believe it is appropriate to give specific full year or quarterly guidance for Nokia Siemens Networks during 2012.
– Nokia Siemens Networks continues to target to reduce its non-IFRS annualized operating expenses and production overheads by EUR 1 billion by the end of 2013, compared to the end of 2011.

LONGER TERM OUTLOOK AND TARGETS
Nokia believes it is currently not appropriate to provide annual targets for 2012 mainly for the following reasons:- 2012 is expected to continue to be a year of transition, during which our Devices & Services business will be subject to risks and uncertainties. Those risks and uncertainties include, among others, consumer demand for our Symbian devices; the timing, ramp-up, and consumer demand related to new products, including our Lumia devices; and further pressure on margins as competitors endeavor to capitalize on our platform and product transition;- Nokia Siemens Networks has announced a new strategy which focuses its business on mobile broadband and services, and has launched an extensive global restructuring program. – Additionally, the macroeconomic environment is making it increasingly difficult to estimate our outlook and provide reliable targets.

Longer-term, Nokia targets:
– Devices & Services net sales to grow faster than the market.
– Devices & Services non-IFRS operating margin to be 10% or more.

Longer-term, Nokia and Nokia Siemens Networks target:
– Nokia Siemens Networks’ non-IFRS operating margin to be between 5% and 10%.

FOURTH QUARTER 2011 FINANCIAL HIGHLIGHTS

The non-IFRS results exclude:

Q4 2011 – EUR 1 432 million (net) consisting of:
– EUR 1 090 million partial impairment of goodwill in Location & Commerce
– EUR 25 million restructuring charge in Location & Commerce
– EUR 119 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ
– EUR 100 million restructuring charge and EUR 36 million associated impairments in Devices & Services
– EUR 2 million of intangible assets amortization and other purchase price related items arising from the acquisition of Novarra, MetaCarta and Motally in Devices & Services
– EUR 86 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks and the acquisition of Motorola Solutions’ networks assets
– EUR 23 million restructuring charge and other associated items in Nokia Siemens Networks
– EUR 49 million benefit from a cartel claim settlement

Q4 2010 – EUR 206 million (net) consisting of:
– EUR 28 million restructuring charge and other associated items in Nokia Siemens Networks
– EUR 85 million restructuring charges in Devices & Services
– EUR 147 million gain on sale of wireless modem business in Devices & Services
– EUR 116 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks
– EUR 119 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ
– EUR 5 million of intangible assets amortization and other purchase price related items arising from the acquisition of OZ Communications, Novarra and Motally in Devices & Services

Q4 2010 taxes – EUR 52 million non-cash tax benefit from reassessment of recoverability deferred tax assets in Nokia Siemens Networks

Q3 2011 – EUR 323 million (net) consisting of:
– EUR 26 million restructuring charge and other associated items in Nokia Siemens Networks
– EUR 59 million restructuring charge and EUR 54 million associated impairments in Devices & Services
– EUR 24 million positive Accenture deal closing adjustment in Devices & Services
– EUR 94 million of intangible asset amortization and other purchase price accounting related items arising from the formation of Nokia Siemens Networks and the acquisition of Motorola Solutions’ networks assets
– EUR 113 million of intangible asset amortization and other purchase price accounting related items arising from the acquisition of NAVTEQ
– EUR 1 million of intangible assets amortization and other purchase price related items arising from the acquisition of Novarra, MetaCarta and Motally in Devices & Services

Non-IFRS results exclude special items for all periods. In addition, non-IFRS results exclude intangible asset amortization, other purchase price accounting related items and inventory value adjustments arising from i) the formation of Nokia Siemens Networks and ii) all business acquisitions completed after June 30, 2008.

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  • Published Date: January 26, 2012 5:15 PM IST
  • Updated Date: January 26, 2012 9:06 PM IST



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