Struggling phone maker finally back in the black
Nokia’s shares closed nearly a fifth higher in New York last night [10th January 2012] after Q4 preliminary results revealed how its Lumia smartphone range was selling much better than expected.
The high margin handsets, running Windows Phone software, represent an act of faith for Nokia’s CEO Stephen Elop who has effectively waged the future of the Finnish manufacturer on backing Microsoft’s mobile platform.
If the fourth quarter results covering the vital Christmas period are any gauge, then it’s a gambit that appears to be paying off. Sales of Lumia phones increased from 2.9 million in the previous quarter to 4.4 million. Sales of cheaper Asha handsets in emerging markets were similarly encouraging, with sales up 50 per cent on Q3 at 9.3 million.
The company even sold 2.2 million Symbian smartphones during the quarter, despite the OS being confined to the dustbin by Elop.
The results immediately sent Nokia’s share price rocketing, climbing more than 18 per cent on the New York Stock Exchange and closing last night at $4.45.
Nokia also reported an underlying profit for Q4 after months of successive losses as it failed to win over customers from arch rivals Apple and Samsung.
Though it’s still early days, Nokia reported estimated margins for the period as between zero and 2 per cent – not wonderful, but certainly a marked improvement on the minus 6 per cent that analysts had expected.