Nokia to skip dividend for first time in 143 years; shares drop

Profit Margins

The company’s devices unit had an operating margin of 1.3 percent in the fourth quarter excluding some items, the first profit in a year and a sign the company is making progress with its cost reductions. In the current quarter, the handset unit will probably have an operating loss equivalent to 2 percent of sales, Nokia said this month. That prediction has an error margin of plus or minus 4 percentage points.

“We are still moving through a very challenging transition, but it is the case today that our products are significantly more competitive,” Elop said today on a call with reporters. “We’ve shown how we can effectively balance our cash and liquidity through this period.”

Nokia Siemens Networks, the phone-equipment venture of Nokia and Siemens AG, topped Nokia’s earlier estimates with fourth-quarter operating profit of 14.4 percent of sales, excluding some items. In October, Nokia Siemens posted its first quarterly sales increase and profit since 2011, helped by demand for long-term evolution, or LTE, networks that allow faster data speeds.

The network venture plans to reduce costs by more than 1 billion euros by the end of this year, compared with the end of 2011, Nokia said today. Its previous target was to reduce costs by 1 billion euros over that span.

Nokia and Siemens abandoned talks with private-equity companies in July 2011 over the network venture as the buyout firms failed to come up with a compelling offer. The parents said two months later Nokia Siemens would “become a more independent entity.”

Bloomberg News

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