Nokia exceeds previous Q4 2012 outlook for Devices & Services

Nokia exceeds previous Q4 2012 outlook for Devices & Services and
Nokia Siemens Networks 
ESPOO, FINLAND -- (Marketwire) -- 01/10/13 --  Nokia provides
preliminary financial information for Q4 2012 and preliminary outlook
for Q1 2013 


 
 
Nokia Corporation
Stock exchange release
January 10, 2013 at 15:00 (CET+1)

 
Nokia today provided preliminary information on certain aspects of its
fourth quarter 2012 financial performance and also provided
preliminary
information on its outlook for the first quarter 2013. 
Nokia now estimates that Devices & Services has exceeded expectations
and achieved underlying profitability in the fourth quarter 2012. 
- Mobile Phones business unit and Lumia portfolio delivered better
than expected
results; and 
- Operating expenses were lower than expected. 
- Devices & Services non-IFRS operating margin for the fourth quarter
2012 now
expected to be between break even and positive 2 percent. 
Seasonality and competitive environment are expected to have a
negative impact
on the first quarter 2013 underlying profitability for
Devices & Services, compared to the fourth quarter 2012. 
Nokia also estimates that Nokia Siemens Networks has exceeded
expectations for
the fourth quarter 2012, delivering record underlying
profits and a third consecutive quarter of underlying profitability. 
- Strong performance in higher margin product categories and
geographic regions;
and 
- Better than expected cost management. 
- Nokia Siemens Networks non-IFRS operating margin for the fourth
quarter 2012
now expected to be between 13 and 15 percent. 
Seasonality is expected to have a negative impact on the first
quarter 2013 underlying profitability for Nokia Siemens Networks,
compared to the fourth quarter 2012. 
Commenting on the preliminary Q4 financial information, 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." 
Preliminary financial information for the fourth quarter 2012: 
Nokia currently estimates that Devices & Services net sales in the
fourth quarter 2012 were approximately EUR 3.9 billion, with total
device volumes of
86.3 million units. 
- Mobile Phones net sales of approximately EUR 2.5 billion, with
total volumes
of 79.6 million units of which 9.3 million units were
Asha full touch smartphones. 
- Smart Devices net sales of approximately EUR 1.2 billion, with
total volumes
of 6.6 million units of which 4.4 million units were
Nokia Lumia smartphones. 
- Total smartphone volumes of 15.9 million units composed of 9.3
million Asha
full touch smartphones, 4.4 million Lumia smartphones and
2.2 million Symbian
smartphones. 
- Devices & Services Other net sales of approximately EUR 0.2
billion, including
a positive impact from non-recurring IPR income of
approximately EUR 50 million. 
Nokia currently estimates that Devices & Services non-IFRS operating
margin for
the fourth quarter 2012 was between break even and positive
2 percent, which
compares to the previous outlook of approximately
negative 6 percent, plus or
minus four percentage points. Devices &
Services non-IFRS operating margin includes a positive impact from
non-recurring IPR income of approximately EUR
50 million. 
During the fourth quarter 2012, multiple factors positively affected
Nokia's
Devices & Services businesses to a greater extent than
previously expected. Preliminary information indicates that the main
factors include: 
- Within the Devices & Services business, better than expected
financial performance in the Mobile Phones business unit and Lumia
smartphones. In addition, Devices & Services recognized non-recurring
IPR income of approximately EUR 50 million; and 
- Lower than expected Devices & Services' operating expenses,
partially due to
greater than expected cost reductions under the
restructuring program. 
Nokia currently estimates that Location & Commerce net sales in the
fourth quarter 2012 were approximately EUR 0.3 billion and the
non-IFRS operating margin was between 13 and 15 percent. 
Nokia and Nokia Siemens Networks currently estimates that Nokia
Siemens Networks
net sales in the fourth quarter 2012 were
approximately EUR 4.0 billion and the
non-IFRS operating margin was
between 13 and 15 percent, which compares to the
previous outlook of
approximately positive 8 percent, plus or minus four percentage
points. Nokia Siemens Networks non-IFRS operating margin includes a
positive impact from non-recurring IPR income of approximately EUR 30
million. 
During the fourth quarter 2012, multiple factors positively affected
Nokia Siemens Networks' businesses to a greater extent than previously
expected. Preliminary information indicates that the main factors
include: 
- More favorable product and regional mix in Nokia Siemens Networks.
In addition, Nokia Siemens Networks recognized non-recurring IPR
income of approximately EUR 30 million; and 
- Better than expected improvement under Nokia Siemens Networks'
restructuring
program to reduce operating expenses and production
overheads. 
Preliminary outlook for the first quarter 2013: 
Nokia expects its non-IFRS Devices & Services operating margin in the
first quarter 2013 to be approximately negative 2 percent, plus or
minus four percentage points. This outlook is based on Nokia's
expectations regarding a
number of factors, including: 
- competitive industry dynamics continuing to negatively affect the
Smart Devices and Mobile Phones business units; 
- the first quarter being a seasonally weak quarter; 
- consumer demand, particularly for our Lumia and Asha smartphones; 
- continued ramp up for our new Lumia smartphones; 
- expected cost reductions under Devices & Services' restructuring
program; and 
- the macroeconomic environment. 
Nokia expects Location & Commerce non-IFRS operating margin in the
first quarter
2013 to be negative due to lower recognized revenue from
internal sales, which
carry higher gross margin, and to a lesser
extent by a negative mix shift within
external sales. 
Nokia and Nokia Siemens Networks expect Nokia Siemens Networks
non-IFRS operating margin in the first quarter 2013 to be
approximately positive 3 percent, plus or minus four percentage
points.  This outlook is based on Nokia
Siemens Networks'
expectations regarding a number of factors, including: 
- competitive industry dynamics; 
- the first quarter being a seasonally weak quarter; 
- product and regional mix; 
- expected continued improvement under Nokia Siemens Networks'
restructuring
program; and 
- the macroeconomic environment. 
Nokia will provide more details when it reports fourth quarter and
full year
2012 results on January 24, 2013. 
Nokia will be hosting a conference call today at 13:30 UK time (8:30
EST). 
The dial-in number for media (listen only - the question and answer
session will
be limited to financial analysts and investors only) is
+1 706 634 5012. Conference ID: 86914019. 
The dial-in number for financial analysts and investors is US: +1 888
636 1561.
Conference ID: 86914019. UK: +44 1452 560 299. Conference
ID: 87088764. 
A replay of the call will be available soon after the call
completion. The replay number is US: +1 800 585 8367.  Conference ID:
86914019. UK: +44 1452 55 0000. Conference ID: 87088764. 
FORWARD-LOOKING STATEMENTS 
It should be noted that certain statements herein that are not
historical facts
are forward-looking statements, including, without
limitation, those regarding:
A) the expected plans and benefits of
our partnership with Microsoft to bring
together complementary assets
and expertise to form a global mobile ecosystem
for smartphones; B)
the timing and expected benefits of our new strategies, including
expected operational and financial benefits and targets as well
as
changes in leadership and operational structure; C) the timing of
the deliveries
of our products and services; D) our ability to
innovate, develop, execute and
commercialize new technologies,
products and services; E) expectations regarding
market developments
and structural changes; F) expectations and targets regarding our
industry volumes, market share, prices, net sales and margins of
our
products and services; G) expectations and targets regarding our
operational
priorities and results of operations; H) expectations and
targets regarding collaboration and partnering arrangements; I) the
outcome of pending and threatened litigation; J) expectations
regarding the successful completion of
restructurings, investments,
acquisitions and divestments on a timely basis and
our ability to
achieve the financial and operational targets set in connection
with
any such restructurings, investments, acquisitions and divestments;
and K) statements preceded by "believe," "expect," "anticipate,"
"foresee," "target,"
"estimate," "designed," "aim", "plans,"
"intends," "will" or similar expressions. These statements are based
on management's best assumptions and
beliefs in light of the
information currently available to it. Because they involve risks and
uncertainties, actual results may differ materially from the
results
that we currently expect. Factors that could cause these
differences
include, but are not limited to:  1) our success in the
smartphone market, including our ability to introduce and bring to
market quantities of attractive,
competitively priced Nokia products
that operate on the  Windows Phone operating
system that are
positively differentiated from our competitors' products,
both
outside and within the Windows Phone ecosystem; 2) our ability
to make Nokia
products that operate on the Windows Phone operating
system a competitive choice
for consumers, and together with
Microsoft, our success in encouraging and supporting a competitive
and profitable global ecosystem for Windows Phone products that
achieves sufficient scale, value and attractiveness to all
market
participants; 3) reduced demand for, and net sales of, Nokia
products that operate on the Windows Phone 7 operating system in
anticipation and availability
of Nokia products with the new Windows
Phone 8 operating system; 4) the difficulties we experience in having
a competitive offering of Symbian devices
and maintaining the
economic viability of the Symbian smartphone platform during
the
transition to Windows Phone as our primary smartphone platform; 5)
our ability to effectively and timely implement planned changes to our
operational
structure, including the planned restructuring measures,
and to successfully
complete the planned investments, acquisitions
and divestments in order to improve our operating model and achieve
targeted efficiencies and reductions in operating expenses as well as
our ability to accurately estimate the related
restructuring charges
and restructuring related cash outflows; 6) our future
sales
performance, among other factors, may require us to recognize
allowances
related to excess component inventory, future purchase
commitments and inventory
write-offs  in our Devices & Services
business;  7) our ability to realize a
return on our investment in
next generation devices, platforms and user experiences; 8) our
ability to produce attractive and competitive devices in our Mobile
Phones business unit including feature phones and devices with more
smartphone-like features such as full touch devices, in a timely and
cost efficient manner with differentiated hardware, software,
localized services and
applications; 9) the intensity of competition
in the various markets where we do business and our ability to
maintain or improve our market position or respond
successfully to
changes in the competitive environment; 10) our ability to retain,
motivate, develop and recruit appropriately skilled employees; 11)
the
success of our Location & Commerce strategy, including our
ability to establish
a successful location-based platform, extend our
location-based  services across
devices and operating systems,
provide support for our Devices & Services business and create new
sources of revenue from our location-based services and
commerce
assets; 12) our actual performance in the short-term and long-term
could be materially different from our forecasts, which could impact
future estimates of recoverable value of our reporting units and may
result in impairment charges; 13) our success in collaboration and
partnering arrangements
with third parties, including Microsoft; 14)
our ability to increase our speed
of innovation, product development
and execution to bring new innovative and
competitive mobile products
and location-based or other services to the market
in a timely
manner; 15) our dependence on the development of the mobile and
communications industry, including location-based and other services
industries,
in numerous diverse markets, as well as on general
economic conditions globally
and regionally; 16) our ability to
protect numerous patented standardized or
proprietary technologies
from third-party infringement or actions to invalidate
the
intellectual property rights of these technologies; 17) our ability
to maintain and leverage our traditional strengths in the mobile
product market if we are unable to retain the loyalty of our mobile
operator and distributor customers and consumers as a result of the
implementation of our strategies or
other factors; 18) the success,
financial condition and performance of our suppliers, collaboration
partners and customers; 19) our ability to manage efficiently our
manufacturing and logistics, as well as to ensure the
quality,
safety, security and timely delivery of our products and
services; 20) our ability to source sufficient amounts of fully
functional quality components,
sub-assemblies, software and services
on a timely basis without interruption and on favorable terms; 21)
our ability to manage our inventory and timely adapt our supply to
meet changing demands for our products; 22) any actual or even
alleged
defects or other quality, safety and security issues in our
products; 23) the
impact of a cybersecurity breach or other factors
leading to any actual or alleged loss, improper disclosure or leakage
of any personal or consumer data
collected by us or our partners or
subcontractors, made available to us or stored in or through our
products; 24) our ability to successfully manage the
pricing of our
products and costs related to our products and operations;
25)
exchange rate fluctuations, including, in particular,
fluctuations between the
euro, which is our reporting currency, and
the US dollar, the Japanese yen and
the Chinese yuan, as well as
certain other currencies; 26) our ability to protect the
technologies, which we or others develop or that we license,
from
claims that we have infringed third parties' intellectual
property rights, as
well as our unrestricted use on commercially
acceptable terms of certain technologies in our products and
services; 27) the impact of economic, political, regulatory or other
developments on our sales, manufacturing facilities and assets
located in emerging market countries; 28) the impact of
changes in
government policies, trade policies, laws or regulations where
our
assets are located and where we do business; 29) the potential
complex tax issues and obligations we may incur to pay additional
taxes in the various jurisdictions in which we do business and our
actual or anticipated performance,
among other factors, could result
in allowances related to deferred tax assets;
30) any disruption to
information technology systems and networks that our operations rely
on; 31) unfavorable outcome of litigations;  32) allegations of
possible health risks from electromagnetic fields generated by base
stations and mobile products and lawsuits related to them, regardless
of merit; 33) Nokia
Siemens Networks ability to implement its new
strategy and restructuring plan
effectively and in a timely manner to
improve its overall competitiveness and
profitability; 34) Nokia
Siemens Networks' success in the telecommunications
infrastructure
services market and Nokia Siemens Networks' ability to effectively
and profitably adapt its business and operations in a timely
manner
to the increasingly diverse service needs of its customers;
35) Nokia Siemens
Networks' ability to maintain or improve its market
position or respond successfully to changes in the competitive
environment; 36) Nokia Siemens Networks' liquidity and its ability to
meet its working capital requirements;
37) Nokia Siemens Networks'
ability to timely introduce new competitive products, services,
upgrades and technologies; 38) Nokia Siemens Networks' ability to
execute successfully its strategy for the acquired Motorola
Solutions
wireless network infrastructure assets; 39) developments
under large, multi-year
contracts or in relation to major customers
in the networks infrastructure and
related services business; 40) the
management of our customer financing exposure, particularly in the
networks infrastructure and related services business; 41) whether
ongoing or any additional governmental investigations into
alleged
violations of law by some former employees of Siemens may involve
and
affect the carrier-related assets and employees transferred by
Siemens to Nokia
Siemens Networks; and 42) any impairment of Nokia
Siemens Networks customer relationships resulting from ongoing or any
additional governmental investigations involving the Siemens
carrier-related operations transferred to
Nokia Siemens Networks, as
well as the risk factors specified on pages 13-47 of Nokia's annual
report on Form 20-F for the year ended December 31, 2011 under
Item
3D. "Risk Factors." Other unknown or unpredictable factors or
underlying
assumptions subsequently proving to be incorrect could
cause actual results to
differ materially from those in the
forward-looking statements. Nokia does not
undertake any obligation
to publicly update or revise forward-looking statements, whether as a
result of new information, future events or otherwise,
except to the
extent legally required. 
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants
that: 
(i) the releases contained herein are protected by copyright and    
other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and     
originality of the information contained therein. 
Source: NOKIA via Thomson Reuters ONE 
[HUG#1669591] 
Nokia
Media and Investor Contacts: 
Corporate Communications
tel. +358 7180 34900
email: press.services@nokia.com 
Investor Relations Europe
tel. +358 7180 34927 
Investor Relations US
tel. +1 914 368 0555 
www.nokia.com
 
 
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