Nokia turns to fourth quarter profit buoyed by strong growth
HELSINKI (AP) Nokia made a net profit of 443 million euros ($502 million) in the fourth quarter and sales grew nearly 10 percent, but its share price fell Thursday as the results were offset by a poor performance in some regions, higher costs and a low dividend.
The Finland-based company said revenue grew to 3.8 billion euros ($4.3 billion) in the period from 3.48 billion euros a year earlier, when it reported a net loss of 26 million euros.
CEO Rajeev Suri noted strong growth in all operations networks, mapping services and technologies and licenses after selling its loss-making devices and services to Microsoft in April.
The company's core networks business, which accounts for nearly 90 percent of sales, grew 8 percent in the period with broadband sales increasing 13 percent. Sales in North America jumped 95 percent, overtaking China to become its third largest market. Growth in Europe, Africa and the Middle East was up 4 percent.
But revenue in its largest market, Asia Pacific, was up only 1 percent and dropped 3 percent in China. Also, higher operating expenses in technologies and mapping services maps, as well as a decline in income from some licensees, strained the performance.
Shares in the company fell nearly 4 percent to 6.87 euros in Helsinki.
Nokia proposed a dividend per share of 0.14 euros, up from 0.11 euros in 2013. It did not include a special dividend like last year, however, and that could have hit the share price, said Neil Mawston from Strategy Analytics near London.
"Even though North America did reasonably well, others like Asia and China didn't perform particularly well. Also, Nokia expanded heavily, especially in the auto market, so extra expenses are playing a role too," Mawston said.
He noted, however, that Nokia is in a better position after having sold its mobile phone division to concentrate on networks, maps and intellectual property rights.
Suri, who took control of Nokia last year on the completion of the handset deal, said 2014 had been "a time of significant change ... and reinvention," while 2015 would be a year of "execution."
Nokia said it expects annual sales growth this year in all three remaining sectors: networks, mapping services and technologies and patents.
Sales increased 15 percent in mapping, where it leads the field in providing navigational systems for cars, and 23 percent in technologies, mainly from payments by licensees, including Microsoft, whose $7.5 billion purchase of the handset unit included a license to some patents.