Nokia (NOK) Executes Well in Q4, Shares Surge
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After getting bombed Wednesday on fears Apple would smear it in the low-end smartphone market, Nokia (NYSE: NOK) investors awoke to some blockbuster news - it is finally executing.
Shares of the beleaguered mobile handset maker surged nearly 20 percent after pre-announcing better-than-expected fourth quarter results.
Nokia said its Devices & Services unit has exceeded expectations and achieved underlying profitability in the quarter. Non-IFRS operating margin for the quarter is now expected to be between break even and positive 2 percent, versus its previous outlook of a drop of 6 percent.
Fourth quarter net sales are expected to be lower then some Street estimates at EUR3.9 billion, but the company's restructuring produced lower-than-expected operating expenses.
Lumia shipments were lower-than-expected at 4.4 million but supply constraints hurt. The company expects this to change and looks to ramp volumes and enter new markets.
Nokia Siemens Networks non-IFRS operating margin for the fourth quarter are now expected to be between 13 and 15 percent and the unit had better-than expected cost management.
Commenting on the quarter , Stephen Elop, Nokia CEO, said, "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 Networks. 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."
Looking to the first quarter 2013, Nokia said seasonality and competitive environment are expected to have a negative impact on the first quarter 2013 underlying profitability for Devices & Services. Seasonality is expected to have a negative impact on the first quarter 2013 underlying profitability for Nokia Siemens Networks. Nokia expects its non-IFRS Devices & Services operating margin in the first quarter to be approximately negative 2 percent, plus or minus four percentage points.
Analysts were cautious about if a turnaround is real. Bernstein analyst Pierre Ferragu notes the upside in the fourth quarter was driven more by aggressive cost cutting and a faster ramp of Windows 8 devices. He said the long-term outlook remains "very uncertain" and believes it is likely the company will have to cut Lumia prices in order to sustain volumes.
Shares of the beleaguered mobile handset maker surged nearly 20 percent after pre-announcing better-than-expected fourth quarter results.
Nokia said its Devices & Services unit has exceeded expectations and achieved underlying profitability in the quarter. Non-IFRS operating margin for the quarter is now expected to be between break even and positive 2 percent, versus its previous outlook of a drop of 6 percent.
Fourth quarter net sales are expected to be lower then some Street estimates at EUR3.9 billion, but the company's restructuring produced lower-than-expected operating expenses.
Lumia shipments were lower-than-expected at 4.4 million but supply constraints hurt. The company expects this to change and looks to ramp volumes and enter new markets.
Nokia Siemens Networks non-IFRS operating margin for the fourth quarter are now expected to be between 13 and 15 percent and the unit had better-than expected cost management.
Commenting on the quarter , Stephen Elop, Nokia CEO, said, "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 Networks. 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."
Looking to the first quarter 2013, Nokia said seasonality and competitive environment are expected to have a negative impact on the first quarter 2013 underlying profitability for Devices & Services. Seasonality is expected to have a negative impact on the first quarter 2013 underlying profitability for Nokia Siemens Networks. Nokia expects its non-IFRS Devices & Services operating margin in the first quarter to be approximately negative 2 percent, plus or minus four percentage points.
Analysts were cautious about if a turnaround is real. Bernstein analyst Pierre Ferragu notes the upside in the fourth quarter was driven more by aggressive cost cutting and a faster ramp of Windows 8 devices. He said the long-term outlook remains "very uncertain" and believes it is likely the company will have to cut Lumia prices in order to sustain volumes.
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