Nokia has posted its first operating profit in more than a year as its smartphone strategy is finally beginning to bear fruit. The Finnish smartphone maker reported fourth-quarter revenues of €8.04bn and an operating profit of €439m, which compares with a loss of close to €1bn a year ago.
The company, which once dominated the smartphone market, is still one of the largest mobile phone makers in the world, even though it has been eclipsed by Samsung in terms of volumes in the past year.
As Apple’s iPhone, and smartphones based on Google’s Android operating system, became major forces in the smartphone world, Nokia was forced to rethink its strategy and align itself closely with Microsoft, which was also striving to regain position in the mobile space with its Windows Phone OS.
That strategy, resulting in the Lumia smartphone family, appears to be working and overall device sales amounted to €3.8bn, out of which €1.2bn of revenue came from smart-device sales.
The company ended 2012 with gross cash of €9.9bn and net cash of €4.4bn on its balance sheet.
Its Nokia Siemens Networks telecoms equipment division reported revenues of €3.9bn with an operating profit of €251m.
“We are very encouraged that our team’s execution against our business strategy has started to translate into financial results,” Nokia CEO Stephen Elop said.
“Most notably we are pleased that Nokia Group reached underlying operating profitability in the fourth quarter and for the full year 2012.
“While the first half of 2012 was difficult for Nokia Group, in Q4 2012 we strengthened our financial position, improved our underlying operating margin in Devices & Services, introduced the HERE brand to expand our mapping and location experiences, and drove record profitability in Nokia Siemens Networks,” Elop said.