Nokia Announces Q4 2013 Results, Revenue And Profit Down On Devices And Services Business

Nokia Devices Division

Nokia today announced its Q4 2013 and 2013 annual results. As Nokia is selling Devices and Services unit to Microsoft, they are now part of discontinued operations in the financial results report. Also, they are not breaking out Lumia and mobile phone business numbers. Devices & Services net sales was EUR 2.753 billion and non-IFRS operating margin negative 4.8% in the fourth quarter 2013. Even though we know that revenue and profit is down from last year, we don’t know how much Lumia devices Nokia sold last quarter. Analysts expected Nokia to sell around 10 million Lumias. Nokia also admitted that Smart devices volume was down from previous quarter affected by competitive industry dynamics including the strong momentum of competing smartphone platforms(Apple’s iPhone launch?).

The decline in discontinued operations net sales in 2013 was primarily due to lower Mobile Phones net sales and, to a lesser extent, lower Smart Devices net sales. The decline in Mobile Phones net sales was due to lower volumes and ASPs, affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio. The decline in Smart Devices net sales was due to lower volumes, affected by competitive industry dynamics including the strong momentum of competing smartphone platforms, as well as our portfolio transition from Symbian products to Lumia products.

The increase in discontinued operations gross margin in 2013 was primarily due to a higher Smart Devices gross margin, partially offset by slightly lower Mobile Phones gross margin. The increase in Smart Devices gross margin was primarily due to lower inventory related allowances, which negatively affected Smart Devices gross margin in 2012.

The decrease in discontinued operations operating expenses in 2013 was due to lower Mobile Phones and Smart Devices operating expenses, primarily due to structural cost savings, as well as overall cost controls.

The discontinued operations net financial income and expense in 2013 was a lower income than in 2012. The lower net income was primarily due to lower net foreign exchange-related gains.

Source: Nokia

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